HomeFWJ TakeawayAlternative Investments

Typically, borrowing has been the most popular way of raising capital however it has been getting increasingly difficult to raise capital from bank loans which has resulted in many companies searching for alternative ways to raise capital.

Alternative investments are a great opportunity and alternative investments can take a number of forms including, but not limited to:

  • Investment in companies as a mini-bond or in exchange for equity;
  • Purchasing luxury items which are expected to appreciate in value; and
  • Property crowdfunding.

Mini-bonds offer investors a steady, fixed rate of income by lending money to existing businesses. Rates of interest can vary, although can be as high as 8%. Mini-bond investments are typically unsecured, non-convertible and non-transferable so it is important you research the company before you make any decisions to invest it in.

Equity crowdfunding enables people to invest in organisations that may include start-up or businesses in their early stages, for a share in the company and the potential for a significant return. Equity crowdfunding websites have made investing in exchange for equity more accessible.  An investor will see a return on their investment either through dividend payments, sale of the company for a lump sum or flotation on the stock market leading to the public sale of shares. Our commercial finance experts will also advise you on whether you need to obtain tax advice to ensure that you are getting the benefit of any tax reliefs which may apply.

Purchasing luxury items are seen as alternative investments opportunity. Alternative investments include items such as

  • wine;
  • stamps;
  • art;
  • antiques; and
  • watches.

Investors typically hold the item for a number of years before taking to auction or selling privately at an appreciated value.

We can also provide advice on alternative investments such as property crowdfunding. In principle the premises (property) follows the standard crowdfunding principle. As an investor you would invest a sum of money along with other crowdfunders. The money raised is then used to purchase a property which is subsequently rented in the private rental market. The rental income is then divided amongst the investors. Once the property is sold at the end of a pre-agreed term and the money generated from the sale of the premises (property) it is divided amongst the investors and the crowdfunding platform

Please contact one of our friendly experts now for assistance. We have a team of experts ready to take your call on business related matters.

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