If you’re seriously considering using small business or startup investment as a way to fund your retirement, it could well be worth checking out the Abundance platform, which now offers a self-invested personal pension (SIPP).

The Abundance Pension will allow individuals to invest from £5000 in the first year either via installments or a lump sum. Investors can choose to fund any of the projects listed on the site at the time of cash injection, or thy can opt to fund future projects as they appear on the site.

A management fee of 0.3 per cent (£100 minimum) will be charged annually, but the first year is free to encourage people to sign up.

The return is made by Debentures, which are offered as between six and nine per cent, which accumulate as cash and can be re-invested into new Debentures.

When the investor hits age 55, they can access their entire portfolio in line with Pension Freedoms recently announced by the government.

“We hope that this new product’s unique combination of tax relief, the diversified and uncorrelated nature of our Debentures, and the steady and attractive returns they pay from investments matching our customers’ values will make the product a significant new motivation for many people to save more towards their retirement,” Bruce Davis, co-founder and joint MD of Abundance said.

“Finally they will have easy and direct access to choose between diverse investment assets, all with a social or environmental benefit, and all paying consistent, strong and uncorrelated returns within a tax-advantaged pension wrapper.”

Behind the launch, Abundance announced research that demonstrates the need for people to think more seriously about how they fund their pension.

It revealed that a staggering 88 per cent of people think it’s their responsibility to fund their own pension, but only 63 per cent have a pension in place.

Almost half of those questioned said they are concerned about the effects of a globalstock market crash, making them more cautious about using investments as a wayto fund retirement.

However, if they know, or get to choose where their pension pot is being invested, they would be more likely to use investments to pay for their future.

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Non-profit management platform NonProfitEasy has acquired Fundly to offer an entire platform for charities and other non-profit organisations and individuals to manage their campaigns and boost engagement with followers.

Previously, NonProfitEasy only controlled the technology back-end elements, including CRM and database management, events, donor engagement and fundraising, but this tie-up means it can also offer the crowdfunding infrastructure to make non-profit campaigns work even more effectively, drumming up interest from supporters outside its core market.

Fundly will continue to exist and all features will be offered as they are at the moment. NonProfitEasy will invest in both platforms to improve them and make them more integrated rather than standalone products. The main change is the rebranding of Non ProfitEasy’s services to fit under the Fundly umbrella, with NonProfitEasy CRM becoming Fundly CRM, VolunteerEasy transforming into Fundly Connect, and Ignite changing to Fundly Enterprise.

“The new Fundly will be the only platform on the market that offers crowdfunding, peer-to-peer fundraising, donor relationship management, membership management, event ticket and registration, and volunteer management as an affordable, integrated end-to-end solution,” said Lomesh Shah, CEO and founder of NonProfitEasy. “It has always been our vision to shake up the market by providing great technology in a modular platform that is affordable for any organization. We are on track to make that happen.”

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The UK government has launched a consultation into how investors will be taxed on peer-to-peer lending, with closing comments released in September.

At the moment, the legislation regarding income tax paid on peer-to-peer investments is somewhat confused. Not only is it complicate for the borrower, the platform and the lender.

The consultation reads: “Comments are sought on the proposed changes to the obligations of peer-to-peer platforms and borrowers of peer-to-peer loans to deduct income tax at source from interest paid,” and recommends that peer-to-peer platforms, lenders of peer-to-peer loans, borrowers of peer-peer loans, representative bodies and tax professionals all read the report.

The government said it supports a more competitive financial sector, where new banks, P2P platforms and other forms of financing can have a chance of success against traditional loans platforms, such as high street and online banks.

However, it now wants to start charging income tax to investors at source on interest payments made from P2P loans, starting April 2017, rather than allowing individuals to be tax exempt and companies to pay tax via the P2P platform.

The current rules mean lenders will have to pay tax on some investments, but not others, making it even more complicated for all parties involved.

The proposals include allowing personal investors to take advantage of their Personal Savings Allowance (PSA), which is £1000 for basic rate taxpayers and up to £500 for higher rate taxpayers and it will apply to the status of the lender rather than the borrower.

“Broadly, income tax would be deducted at source if the lender was an individual, or was based overseas,” the proposal reads. “Under this approach the person responsible for deducting any tax from the payment will only have to keep track of the status of the lender, and will not have to consider the identity of the borrower for each loan part that the lender has invested in.”

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With the rise of property crowdfunding becoming the next big thing this year, thanks to the demand for housing, P2P platform CrowdProperty has announced it has been used for pledges over £1m.

The site only launched last year and it is aiming to raise £20m towards its projects by the end of the year. It works by charging borrowers a fee of between three and five per cent, with the gross interest passed on to the loan holders.

Those who want to borrow money to develop a property can apply for a loan of up to 100 per cent on new developments on a 10-11 per cent annual rate. The interest charged is worked out using a number of due dilligence criteria, which assesses the risk of the loan.

It secures all the loans against the asset with a first legal charge, making it comparable to a mortgage from a bank or building society.

Simon Zutshi, founder director of CrowdProperty said: “Passing the £1 million target for lending is a key milestone in our growth strategy but we expect growth to accelerate significantly now that we have so many new, active lenders joining our crowd.

“With any new P2P proposition it is vital to ensure that early lenders build their confidence with real returns from solid projects delivering great value.”

The platform’s lenders receive a return of 10 per cent a year on the money they lend, which is higher than many other peer-to-peer lending platforms, Zutshi continued.

“Another exciting development which has recently become available via our platform is the added potential now for anyone with a SIPP or SASS pension to lend to our development projects, providing another angle for many people wanting greater diversity and a solid return on their capital,” he said.

To date, CrowdProperty has listed 100 projects on its site, with many more planned for the coming months.

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Metro Bank has announced it will lend funds through the Zopa P2P lending platform, offering an attractive rate of interest for investors.

Giles Andrews, CEO and co-founder of Zopa said: “This is another milestone for Zopa and the P2P industry as this partnership brings together two key challengers to the traditional financial services landscape and signals our intent to become a mainstream service.”

He added that partnering with Metro Bank is an important forward step in the P2P lending platform’s history because it demonstrates retail banks are accepting the potential of such lending and support of the growing entrepreneurial status of the UK.

“We’re delighted that Metro Bank is lending through Zopa and we look forward to working even closer with Metro Bank on future opportunities and products,” he said.

Craig Donaldson, chief executive officer at Metro Bank added: “At Metro Bank we’re committed to revolutionising UK banking and we’re delighted to have partnered with Zopa, a fellow financial challenger.

“The partnership we have with Zopa is a cultural fit that works perfectly with our commitment to providing a convenient and customer-focused banking experience and we look forward to working with them closely.”

Zopa lends money to people looking to purchase large items such as cars and those who need funds to consolidate their debts or renovate their home. To date, it has lent £858 million from 51,000 lenders and offers rate of interest lower than many high street banks, while also offering investors higher rates of interest they would usually obtain through long-tem investments.

Loan terms are either three or five years and interest rates are four per cent and five per cent respectively. It’s a flexible investment for lenders, allowing them to take lump sums out when they wish or receive monthly payments as extra income.

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Peer-to-peer lender Assetz Capital has raised £3m funding through Seedrs, making it the second most successful funding campaign on the crowdfunding website.

Seedrs has supported a number of alternative crowdfunding platforms in recent months, includingTrillion Fund, Landbay, CrowdLords, CrowdCanDo and PledgeSports.

Assetz Capital was originally seeking £2m, but it surpassed its target by more than 50 per cent thanks to 731 equity investors.

Jeff Lynn, CEO and Co-Founder of Seedrs, explained: “All of these crowdfunding and peer-to-peer  platforms focus on asset classes other than equity, so when raising capital for themselves, they wanted to work with the leader in the equity crowdfunding space. They chose Seedrs because they understand the importance to them and to their investors of our  “equity crowdfunding done properly” approach.

“We’re proud to have enabled equity crowdfunding and peer-to-peer companies to raise money successfully.  Our peers recognise that our approach, based on simplicity and transparency, consistently delivers results. It’s equity crowdfunding done properly.”

Other alternative funding companies that have seen successes on Seedrs include environmental and social platform Trillion Fund that raised more than £500,000 last year and LandBay, a P2P lending platform that also exceeded the half a million pound mark in 2013/2014.

Stuart Law, Co-Founder and Chief Executive of Assetz Capital, added: “We chose Seedrs for our crowdfunding round because we know it to be the most professional and respected platform in the equity space. Its size and reach were important factors, but so was its focus on helping investee companies grow while protecting investor rights.

“We were thrilled with the outcome of our campaign and fully understand why Seedrs is the equity platform that other crowdfunding and peer-to-peer lending platforms choose.”

The UK alternative funding market is predicted to be worth £4.4 billion by 2015, almost three times its size in 2014 as businesses move away from traditional business loans to raise capital for their companies.

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According to Massolution’s 2015 crowdfunding survey, the industry should raise $34.4bn this year, doubling 2014’s $16.2bn funds, thanks to high levels of growth in Asia.

The continent was responsible for $3.4bn (rising 320 per cent growth) of revenues last year, which is slightly more than Europe’s funds of $3.26bn, the third best performing territory in the world. Unsurprisingly, the US continues to lead, with 145 per cent growth year on year, accounting for $9.46bn of total crowdfunding revenues last year.

Massolution founder and CEO Carl Esposti told Crowdsourcing: “Surprises materializing from this year’s research included the astounding growth in the P2P and P2B lending market in Asia, stemming largely from the Chinese market.”

The study involved examining 1250 active crowdfunding platforms around the world. 463 of these freely gave Massolution information about the amount raised and types of campaigns on their websites, while the research team uncovered data from the remaining platforms.

Lending-based platforms saw the biggest revenue increases, raising $11.08bn in 2014. However, rewards- and equity-based campaigns still put in a good show, although the individual campaigns tend to raise less money than lending schemes.

Business and entrepreneurship was the most popular crowdfunding category last year taking 41.3 per cent of the total crowdfunding pie, although social causes, films and performing arts, property and music and recording arts all took places in the top five spots.

Other insights in the report include the market shares of top five and top ten crowdfunding platforms in North America and Europe, platform leaderboards by region, growth in the number of and worldwide distribution of platforms, average deal size for the leading platforms and types of campaigns, individual project success rates and what Massolution considers to be the 15 biggest crowdfunding trends and developments in 2014, looking ahead to 2015.

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With reports of crowdfund investors being scammed in rewards-based campaigns, never receiving the product they pay for, is crowdfunding just getting a bad rap or is it really unsafe?

An article on Florida’s 10 News site explores whether alternative funding platforms like GoFundMe, CrowdRise and GiveForward protect investors enough and whether they’re actually a breeding ground for scammers.

The website spoke to Better Business Bureau about crowdfunding and says you should check whether the campaigns you’re funding are legitimate. After all, the beauty of crowdfunding is that almost anyone with a cause can launch a project on a crowdfunding site to raise funds for something they believe in.

Bryan Oglesby of the Better Business Bureau says: “You don’t know truly if the money is going to a need. Donating to a site, to an individual’s need is similar to walking on the street, seeing homeless person and handing them 20 dollars cash.”

One example the publication gives is the case of James Robertson who walks 21 days to work and back everyday. A campaign started up on GoFundMe to buy him a car to help him on his everyday struggle. But how can GoFundMe ensure Evan Leedy, who set up the campaign is legitimate and will ensure the $350,000 (£227,000) raised will actually go to the intended recipient?

It argues that although this particular campaign hasn’t been proven as a scam or otherwise, it’s sensible to be wary about the campaigns promoted on any platform.

GoFundMe responded to this with the following statement: “with millions of campaigns, it’s not feasible for GoFundMe to investigate claims stated by each campaign organizer … only donate to people you personally know and trust.”

Like with any investment, before contributing money to a campaign, investors should do their due diligence and ensure the campaign is legitimate, whether peer-to-peer fundraising, equity or rewards-based investment.

Despite Kickstarter announcing it is testing Perk Insurance to cover its investors if the advertised products never materialises, it’s also the responsibility of the investor to ensure the cause they are contributing to is likely to be real.

Image source: Jon Feinstein/Flickr

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RBS, Funding Circle and Assetz Capital have developed an initiative to boost small business funding in the UK.

When a small business approaches RBS for lending, they will be referred to crowdfunding sites Funding Circle and Assetz Capital to raise funds via P2P lending.

The news comes shortly after Santander revealed it too would be working with Funding Circle to help companies stump up the cash they need to develop a business idea.

Exchequer George Osborne voiced his support for such schemes, saying it’s part of the government’s long-term strategy to ensure small businesses have access to the finances they need to grow and succeed.

“It’s only through harnessing innovations in finance, alongside our existing world class knowledge and skills in financial services, that we’ll ensure Britain’s financial sector continues to meet the diverse needs of businesses here,” he said.

“That is why I announced a further package of measures to support peer-to-peer platforms at last month’s Autumn Statement, including a new bad debt relief to create a level-playing field for the industry. It is great to see companies like Funding Circle forging a new partnership with RBS to ensure that small British companies have the best access to funding.”

RBS currently provides a third of all small business loans, so implementing the plan to use P2P lending for raising capital through the high street bank was a natural step.

Samir Desai, CEO and co-founder of Funding Circle said: “This partnership recognises our role as the largest marketplace for unsecured and secured small business lending. Partnering with the UK’s biggest small business high street lender is a huge vote of confidence in our model, and we look forward to working together to create thousands more opportunities for small businesses to access finance and grow.”

The pilot will begin next week in Scotland and South West England, with the scheme rolling out nationally over a three-month period.

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The European Securities and Markets Authority (ESMA) has released a new document outlining its opinion, the rules and advice on investment-based crowdfunding.

The aim of the documentation is to ensure all EU states are aligned in their policies and these policies allow for better regulatory and supervisory control. It will also ensure lesser-known or untrustworthy crowdfunding platforms are regulated in the same way as the larger sites.

Steven Maijoor, ESMA Chair, said: “ESMA’s aim is to enable crowdfunding to reach its potential as a source of finance, while ensuring that risks to users of crowdfunding platforms are identified and addressed in a proportionate and convergent way across the EU.

“We believe that there are benefits both for investors as well as for platforms by operating inside rather than outside the regulated space.

The ESMA looked at different models of crowdfunding, including equity-based and rewards-based platforms, saying there’s not a one-size-fits-all model fro crowdfunding, so each platform should be assessed based on its merits rather than applying a blanket legislation to all.

ESMA says it wants the EU to come up with guidelines to cover some holes in the current legislation though, including ensuring crowdfunding platforms have a reserve of money to re-pay investors should the project not go ahead after the money has been taken. This would prevent investors from being out of pocket should fraudsters advertise new business ideas on the sites.

The new recommendations will ensure crowdfunding continues to be seen as a viable investment for investors, whether they are experienced or not, while providing them with extra security. ESMA also hopes it will also encourage more businesses to advertise their services and drum up funding for new ideas on a wider range of platforms.

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