Funding app Lightyear is at the moment launching UK enterprise funding accounts that may allow sole director corporations to spend money on shares, funds and ETFs on the identical phrases as its retail prospects.
Together with the brand new accounts, Lightyear has additionally struck a brand new partnership with asset supervisor BlackRock which can make its cash market funds accessible to Lightyear’s enterprise prospects.
“Two years in the past money wasn’t an asset for companies, it was a legal responsibility in lots of components of Europe as a result of once you had masses of cash you needed to begin paying the financial institution to maintain it there,” Lightyear CEO and co-founder Martin Sokk informed AltFi.
“Now it’s the opposite approach round.”
Cash market funds are a sort of mutual fund that invests in money, money equivalents and short-term debt securities, and are sometimes utilized by bigger corporates as a money administration resolution resulting from their low threat and excessive liquidity.
Nevertheless, these funds have excessive charges or minimal funding quantities within the hundreds of thousands or tens of hundreds of thousands, which exclude them as an funding for almost all of companies.
With its new enterprise funding accounts corporations can now entry these cash market funds for an annual charge of between 0.09-0.30 per cent.
The remainder of Lightyear’s pricing for companies mirrors that of its retail providing, together with curiosity of as much as 4.50 per cent paid on uninvested money.
Whereas Lightyear competes towards the likes of Hargreaves Lansdown and Freetrade within the retail funding house, for this new market of small and medium-sized companies Sokk says Lightyear has a special rival.
“To be sincere, I don’t see large rivals available in the market, possibly our rivals are banks as a result of companies have already got the cash there.”
Right now Lightyear is beginning with sole-director companies, however Sokk says the corporate can be engaged on assist for multi-user and bigger companies within the subsequent few months.
