Downing Promotion: earn up to 6.25% with these crowdfunding bonds
Get up to 6.25% if you invest in these bonds.
Investment crowdfunding platform Downing is offering two asset-backed bonds with returns of up to 6.25%.
With these types of bonds, you lend directly to the companies themselves. You can choose from an onshore wind farm or a small chain of country pubs.
Image source: Downing
If you apply before the end of the respective Early Bird bonus periods you can get a 0.5% interest per annum on your investment.
Just put in a minimum of £100 and you’re ready to go – this also makes it really easy to diversify your portfolio and minimise the risk to your money.
Get more information on the Downing site
How does Downing work?
It’s like Kickstarter, but instead of investing in potential new products or services, you invest in bonds for asset-backed businesses with existing revenue streams, like a reliable customer base or Government grants.
Downing uses due diligence to make check that the firms you invest have a good reputation and a good chance of you getting your returns and provide bondholders with a certain level of security. Its annual monitoring fee isn't paid until investors’ cash and interest have been safely returned to give you a little extra peace of mind.
As a security trustee, Downing has the legal right to step in and take charge of a company’s assets to try and recover any money it lends you should it default.
Downing launched its debt-based crowdfunding (investing in bonds, in this case) platform earlier this year with its first bond selling out in just under two weeks. It’s been investing in ‘real’ businesses for over 20 years, traditionally through tax-efficient vehicles such as Venture Capital Trusts or the Enterprise Investment Scheme.
Julia Groves, head of crowdfunding at Downing says:
“We want to make being part of ‘the crowd’ more tangible by helping people invest directly in real things and companies they understand.”
Get more information on the Downing site
What are the risks?
Just bear in mind that the companies you're investing in are fairly new and they might not be able to achieve their financial goals, potentially leaving you out of pocket.
Always remember that your capital is at risk and that your returns aren’t guaranteed. These bonds aren’t covered by the Financial Services Compensation Scheme (FSCS) so if the firm you invest in goes bust, you might not get your money back. However, if Downing takes control of the company's assets, there is a chance you could recover at least some of the cash.
The rise of crowdfunding
Crowdfunding is becoming more and more popular. According to Hitwise, 27 million British people visited crowdfunding websites in the first three months of 2016 alone.
Downing CEO Tony McGing praises crowdfunding’s ‘greater accessibility and lower fees’ over the traditional investing model.
It’s also good news for businesses who struggle to get funding through traditional avenues, as around 20,000 UK businesses raised more than £2 billion in 2015 through crowdfunding and peer lending.
This article has been updated as the headline rate available fell from 7% to 6.25% as of 17:00 on July 13. It has also been amended to reflect that two of the original four bonds are no longer available.
The views expressed in this advertorial are those of Downing and do not necessarily represent those of loveMONEY. The information included does not constitute regulated financial advice. You should seek out independent, professional financial advice before making an investment decision.
Read more on investing:
How to pick the best pension funds
Comments
Be the first to comment
Do you want to comment on this article? You need to be signed in for this feature