Two new IFISAs set to launch
Two new Innovative Finance ISAs (IFISAs) are set to launch in the coming weeks, after HMRC authorised two more companies to offer the peer-to-peer lending tax wrapper.
This will bring the total number of IFISAs on the market to 43, up from 41 previously.
The IFISAs will be offered by NextCrowd and Paxiot. NextCrowd is a newly-created crowdfunding platform which operates as part of the NextFin group. Its incorporated company, Business Agent, was granted an IFISA licence in March 2023, and also holds permissions to offer stocks and shares ISAs.
Read more: Where should you put your IFISA money this ISA season?
Meanwhile Paxiot is a white label crowdfunding solution which is affiliated with the RW Blears law firm. It is run by Ollie and Chris Blears, and RW Blears’ solicitor Frank Daly.
Roger Blears, founder and senior partner of RW Blears, told Peer2Peer Finance News that the platform will work with small- and medium-sized enterprises (SMEs) to allow them to run their own crowdfunding campaigns by offering IFISA-wrapped corporate bonds on their website.
Read more: IFISA returns on the rise
“Paxiot exists to help SMEs raise capital by running crowdfunding offers from their own website,” said Blears. “Rather than going through Seedrs or Crowdcube, we can license the technology and it will appear as part of the company’s website.”
Paxiot is currently not fully in operation as the software is being updated to accommodate the recent financial promotion rules. However, it is expected to launch soon.
Ahead of the launch, the Paxiot website contained a message advertising its “custom fit, own brand investment portals…which utilise best in practice payment integration, regulatory compliance and investor communication to help you execute a seamless direct investment round or offer to the public.”
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Meanwhile, the NextCrowd platform launched at the end of April and is set to onboard its first clients “any day now,” according to Sacha Bright, founder and chief executive of Business Agent.
“It has launched and we’re about to take on three or four customers any day now,” Bright said.
“Our mission has always been to help entrepreneurs get the funding that they deserve. What we mean by entrepreneurs is not just equity businesses that are start-ups in the innovation sector – we’re talking about small property developers and developers with unique projects.
“Now we can match these entrepreneurs and developers with investors who are seeking to do more with their money and find different things to invest in.”
NextCrowd will sit alongside the NextFin crowdfunding platform aggregator, which has been operational for the past seven years. NextFin describes itself as “a place where entrepreneurs, investors and alternative finance providers meet.” It rates and aggregates both equity and debt crowdfunding investment opportunities from a variety of crowdfunding platforms so that investors can make more informed decisions, and borrowers can seek new sources of finance.
Bright said that he expects to see a lot of overlap between users of NextFin and NextCrowd.
“We want to bring investors and borrowers together,” he said. “Offering a crowdfunding platform directly alongside the aggregation model will drive more people together.”
NextCrowd has partnered with Globacap which will handle all of its client money needs.
Bright added that he plans to relaunch the NextFin aggregator platform in the future.
“We are still collecting data behind the scenes and we are planning to relaunch the aggregator in the future and we’re seeking new funding at the moment to do that,” Bright said. “But in the meantime we are going to be crowdfunding ourselves.
“We have our own IFISA licence now and we’re partnering with other businesses and we now have the ability to hold client money and do crowdfunding directly ourselves for developers and P2P loans.”
Both NextCrowd and Paxiot received their HMRC ISA manager authorisations in March 2023, after a speedy approval process of less than six weeks.
The IFISA market has been streamlined in recent years, with a number of IFISA managers leaving the market. Assetz Capital, ArchOver, Funding Circle and Zopa are among the former IFISA giants which have opted to cease working with retail investors since attaining their ISA manager permissions, leaving tens of millions of pounds of IFISA money in search of a new home.
Earlier this year, HMRC told Peer2Peer Finance News that no new IFISA licences had been granted since July 2021, when London Court was granted IFISA permissions.