What assets are IFISA eligible?

There are a number of different types of investment that are IFISA eligible, and the main asset classes that can be held are peer-to-peer (P2P) loans and debt-based securities (also known as mini bonds).

If you are thinking of investing into an IFISA, it's important that you understand exactly how your money will be invested by your chosen provider, and how it will generate the target returns on offer.


Whilst both eligible areas to invest into via an IFISA fall under the alternative investment banner, they do differ:

A debt-based security is an asset-backed investment opportunity - including investment into property and green energy projects - and they often offer target returns of between 4 and 8%.

The process of peer-to-peer lending is when a consumer or SME borrows funds from individual lenders. P2P loans generally offer target interest rates of 6% upwards. 

The main eligible, underlying assets of an IFISA include;

  • property projects
  • green energy projects
  • SME lending
  • consumer lending

When using an IFISA to invest into property, you're often loaning funds to developers via fixed term property bonds in order to finance the development of residential or commercial property projects. 

Read more:download our free property bonds guide

You can also invest into green energy projects with an IFISA, providing funding for the likes of hydropower stations and wind farms.

If you hold an SME loan in your IFISA, you're supporting the UK business sector, offering businesses the funding they need to accelerate growth.

With a consumer loan in your IFISA, you're lending funds to everyday borrowers to use as they need.

In order to generate the target returns on offer through investment into the above assets, IFISA providers do several things;

  • Platforms operate in a similar way to a traditional bank, however it's important to understand that IFISA providers are not banks, and they do not offer the same protections that a bank often does.
  • Generally, IFISA providers charge fees to the borrowers, but not to the investors.
  • Borrowers will typically pay an arrangment fee when taking out a loan, and an interest margin throughout the course of the loan, as well as an exit fee when the loan is repaid.
  • With much lower overheads than traditional banks, IFISA providers have the opportunity to provide competitive priced loans to borrowers, while offering better interest rates to investors.

As with all investments, investors must understand the key IFISA rules before making an investment to ensure they are making the best choices for their portfolio.

Read more:download the IFISA guide

Similarly, as IFISAs fall within the ISA wrapper, it's important to understand where your annual ISA allowance will be allocated (i.e. all £20,000 - as of the 2022/23 tax year - in an IFISA or part in a Stocks and Shares ISA, part in a IFISA and part in a Cash ISA).



CARLTON Bonds are an IFISA provider specialising in fixed term property bonds.

Against a backdrop of low interest rates and a volatile stock market, the IFISA can provide an attractive investment opportunity for experienced investors. 

With the ability to hold peer-to-peer loans and debt-based securities, IFISA investments have the potential to generate higher rates of return than more traditional investment routes for investors with a greater appetite for risk.

To find out more, download our free IFISA guide.

The Innovative Finance ISA Guide