The easyMoney Glossary – Part One
(Capital at risk - Past performance is not an indicator of future results. Not protected by the Financial Services Compensation Scheme (FSCS). Money invested through easyMoney is concentrated in property and could be affected by market conditions. For the same reason, instant access cannot be guaranteed. We do not offer investment or tax advice. Please note that the parameters contained in this blog are subject to change as our business evolves).
At easyMoney, we like to think that our approach is summed up in our name: that is, we aim to make everything easy. Or rather, to connect with our investors to make the features and benefits of our P2P lending platform as clear-cut as possible.
In our view, there’s no need for financial matters to be complicated, so everything you’ll read about our IFISA lending platform is open and authentic.
To support our jargon-free style, we’ve put together two glossary blogs to explain the terms that you may see on our website, or in our communications with you. This is the first – lookout for the second one on our site very soon.
We’ve picked out the words and phrases that may require just one or two further definitions, or that our would-be investors ask us about on a regular basis.
Some good news if you're thinking of an IFISA with us:
We’re delighted that on May 27th Peer2Peer Finance News reported that in 2020, despite the impact of the Covid-19 pandemic, easyMoney made a profit of £269,000 and paid out an average interest rate of 7.4% to our investors. This, despite an obviously challenging year for many.
In fact, we think that our approach to lending, as well as our team’s combined years of property market experience and expertise, has hopefully served us – and our customers - outstandingly well. Last year saw us open up our first shop in Chelsea, inside Stelio's "easy" building. With our distinctive orange branding, we’re easy to spot at 158-164 Fulham Road, Chelsea, London.
Set against this update, here’s your guide to some of the terms you’ll see and hear most often with easyMoney.
easyMoney Glossary Part 1
Target Rate. The average from across the range of interest rates that easyMoney targets to pay investors. With the exception of High Net Worth and Professional investors (who select their own loans), target rates apply to all of our products and will vary, depending on how much you invest.
Don’t forget: with an IFISA from easyMoney, you can invest up to £20,000 tax-free in each financial year.
Have a look at our Home page, where the target rates for each product are published.
Actual Rate. The amount of interest earned by all investors from a single product during a calendar year. This rate will include other elements, for example, Cash Drag (defined below), Defaults, and Compound Interest.
You may be interested to learn that in line with easyMoney’s compliance with industry regulations, we publish an “Outcomes Statement” that summarises how our loan book performs year on year.
Compound Interest. Simply defined, it’s the opportunity to earn additional interest on the interest received from your capital. The default setting on your account is that your interest is automatically reinvested in new loans (although you won’t have the same access to your money as if you withdrew it). Of course, you can change this should you wish to, and choose to have your interest paid to your available balance or set it to be withdrawn to your bank account every month.
With compound interest, your investment could therefore grow exponentially.
Auto-Re-Investment. As it sounds, this default setting – referenced above – automatically re-invests your interest, with the aim of maximising your returns.
Loan Diversification. At easyMoney, we focus on bridge (or bridging) loans, as well as development loans to property professionals. The projects requiring loans can be many and varied: from a single apartment through to a longer-term housing development
Diversification across more than one loan helps to mitigate risk. easyMoney has grown its loan portfolio steadily, and we expect to increase our diversification in line with the growth of the loan portfolio.
It’s worth pointing out that with easyMoney, all valuations are undertaken by RICS valuers who have experience in a specific geographical property location. easyMoney's default rate can be checked on our statistics page.
We should reiterate, however, that there is no such thing as a risk-free investment. Your capital is at risk and is not covered by Financial Services Compensation Scheme (FSCS). You should always seek independent financial advice before you invest.
Cash Drag. The interval between your money being held in cash and easyMoney investing into loans on our platform. For example, this could happen when you place your initial investment and the loan drawn down by the borrower is delayed by any reason. Also, when a loan is repaid, and we re-invest the proceeds, it may not be allocated to a new loan immediately.
We hope that you’ve found this guide useful. Look out for Part 2 very soon.
Here at easyMoney, we believe that experience in our chosen sector – in this case, property – is essential. This know-how has enabled us to remain in robust health and to deliver equally robust interest rate returns to our investors during 2020. We’d be pleased to hear from you to talk through loans or any assistance with ISA transfers. Please remember we are not allowed to give any tax or investment advice.
All the facts and figures presented are accurate at the time of posting.
easyMoney is not a cash savings account. You may not get back the full amount you put in. Your capital is at risk if you invest. Peer-to-peer investments are eligible for an Innovative Finance ISA which is not a Cash ISA. They are not protected by the Financial Services Compensation Scheme (FSCS). Money invested through easyMoney is concentrated in property and could be affected by market conditions. For the same reason, instant access cannot be guaranteed. We do not offer investment or tax advice.
easyMoney is the trading name of E-money Capital Ltd, a company incorporated in England & Wales. Registered office is 5 Fleet Place, London, England, EC4M 7RD (Company No. 04861007). E-money Capital Ltd is authorised and regulated by the Financial Conduct Authority (FCA) #231680.