Prestige vehicle lessor XL has used the Crowdstacker peer-to-peer (p2p) platform to raise £1m in investment.
XL intends to use the investment to increase its short-term contract hire business. The finance was structured by the St. Albans-based Crowdstacker in conjunction with Trade Finance Global (TFG).
The investment will finance XL’s purchase vehicles at volume discounts, which will then be leased onto both individual and UK-based SME customers for short terms between 6-18 months.
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.
The investment is eligible to be held in the Innovative Finance ISA (IFISA) as well as the standard P2P Account.
During the 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 chief operating officer, Jonathan Littlewood said: “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 seven-month term with 4% per annum 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 reached £1m from 255 investors and is now closed to further investment.