Automotive sector business XL, has raised £1 million via the Crowdstacker investment platform.
XL Group are car lease specialists and plan to use the investment to bolster its short-term contract hire business. The finance has been structured by Crowdstacker (crowdstacker.com) in conjunction with TFG (www.tradefinanceglobal.com).
XL Group (www.xlltd.com) will use the investment to purchase vehicles at substantial volume discounts, which are then leased on to its customers - individuals and UK SMEs - for short terms of 6, 12 and 18 months.
The company, which was launched in 2006, provides an alternative to conventional long-term vehicle financing, and has grown its fleet substantially over the last 12 months.
Built in security and tax efficiency
XL enters into buyback agreements with the manufacturer or dealer for each vehicle it purchases. The investment is secured on the assets of XL CST Limited via a first ranking debenture. These assets include the vehicles purchased as well as the vehicle lease income.
Additionally, it offers investors the ability to invest tax efficiently.
The investment is eligible to be held in the Innovative Finance ISA (IFISA) as well as the standard P2P Account.
The Innovative Finance ISA shares the same investment limit as both of the other other ISA options, Cash and Stocks & Shares. During the current (2018/19) Tax Year, individual investors may invest up to £20,000 into one or more ISA. Interest income generated from funds deployed via an IFISA is protected from income tax.
Crowdstacker COO, Jonathan Littlewood states "This new automotive sector investment opportunity allows our investors to diversify their portfolio even further, whilst still taking advantage of the tax-free earning potential offered by the Innovative Finance ISA."
The XL Loans investment offered a 7 month term and with 4% p.a. return. The short term is set to coincide with one full cycle of XL’s car hire lease period - including the time taken for XL to lease a car through to the pre-agreed buyback agreement with the car manufacturer (or dealer).
The XL Loans fundraise total has reached £1 million from 255 investors and is now closed to further investment.
As with any investing, your capital is at risk if you lend to businesses.