On Friday, online lending platform ThinCats announced it was delaying the launch of its Innovative Finance ISA (IFISA). The lender originally set out to launch the IFISA shortly before the end of 2017, but has pushed the launch to after the new year begins.
According to Bridging and Commercial, ThinCats revealed it will begin its ISA launch by accepting new subscriptions from lenders who have already registered an interest.
“We will write to those lenders who have registered their interest straight after the Christmas and New Year Break with details of how [they] will be able to open an account and issue regular updates form that point until the launch. The launch date itself will be confirmed as soon as we are confident that the new systems enhancements are ready to deploy.”
ThinCats also announced its new lender fee. The lender noted that existing investors registered prior to January 1, 2018 will have no charge, while new investors registered after January 1, 2018 will have a lender fee equivalent to 1% reduction in the annualized rate of interested received based on an illustrative loan earring 10% interest pa gross of the Lender Fee. This will result in interest paid of 9% net of the fee.
“The Lender Fee is calculated as 10% of interest paid to new investors. For an illustrative loan earning 10% interest gross, the Lender Fee represents a 1% reduction in the interest received by new investors. If the interest earnt on a loan part is higher or lower than the illustrative rate of 10%, the Lender Fee will vary accordingly. So, if a loan earns 8% gross interest, the Lender Fee will represent a 0.8% reduction in the interest payment. If a loan earns 12% gross interest, the Lender Fee will represent a 1.2% reduction in the interest payment.
“The Lender Fee is collected by applying a fee at the same time as an interest payment is paid to an investor. The fee is shown separately to the interest payment. For example, a gross interest payment of 8% pa would also have a Lender Fee equivalent to a 0.8% reduction applied separately, resulting in net interest received of 7.2%. The Lender Fee will not be applied to investors registered with an account before January 1st 2018. It is not necessary to have funded the account, nor to have purchased loan parts before January 1st 2018 to be exempt from the fee.”
ThinCats added that if an existing investor opens another account after January 1, 2018, the new account will not attract a lender fee provided that the investor notifies the account opening team that an existing account is already held.