Lightyear Commences Introduction of Business Investment Accounts in the UK

credit: pymnts

UK (Parliament Politic Magazine) – In an announcement, Lightyear has introduced specialized investment accounts tailored for small businesses, including freelancers and sole directors, within the United Kingdom. The investment platform’s goal is to address the underserved sector of small businesses, particularly those without staff, by granting them access to investment opportunities and the potential to earn interest on their corporate funds. Lightyear communicated this initiative in a press release sent to PYMNTS on Wednesday, August 23rd.

Investment Accounts To Be Offered To Small Businesses 

The release emphasized that small businesses frequently encounter difficulties in obtaining business accounts from major retail banks, which typically provide minimal or no interest and have strict onboarding procedures. Freelancers and businesses with sole directors face additional challenges, as they often lack access to such accounts and struggle to navigate the intricate process of entering the stock market.

By offering investment accounts to small businesses, Lightyear aims to assist them in optimizing their corporate funds and safeguarding against the erosion of their cash reserves due to inflation, as outlined in the press release.This endeavor is particularly advantageous for sole directors, who constitute the largest and most underserved demographic within the market. Nonetheless, Lightyear has intentions to expand its business solutions to encompass various types of small to medium-sized businesses (SMBs) and larger startups in the upcoming months.

Small Businesses To Get An Easy Access Ro Money Market Funds 

To facilitate access to Money Market Funds (MMFs) for UK enterprises, Lightyear has entered into a partnership with investment firm BlackRock. This collaboration empowers both business and retail investors to access MMFs without the usual substantial minimum investments. 

Additionally, the platform presents a 4.5% interest rate on uninvested British pounds, offering UK investors a robust avenue to capitalize on global high interest rates through both cash holdings and investments.

Martin Sokk, Co-founder and CEO of Lightyear, underscored in the press release that this launch is addressing a gap in the business investment landscape. He pointed out that while progress has been made in the retail investment sector over recent years, the business sector lags behind, especially for solo entrepreneurs.

Highlighting the persistent impact of inflation in the UK, a report by the Office for National Statistics revealed that in comparison to the pre-pandemic month of February 2020, the total retail sales value was 17.9% higher in June, while the sales volume was 0.2% lower.

Freelancers Empowered to Invest and Earn Interest on Company Funds Through New Business Accounts

In 2022, the Federation of Small Businesses estimated that the UK was home to 5.5 million private sector businesses, with 4.1 million of them operating without employees. This substantial demographic remains a significantly underserved market within the financial sector. Traditional business accounts offered by mainstream banks are both challenging to secure and yield minimal to no interest. 

In light of an upcoming interest rate increase, Lightyear’s introduction of business accounts is poised to assist freelancers and sole director enterprises in optimizing their corporate funds. This initiative prevents surplus company cash from being eroded by inflation while held in standard bank accounts.

While sole directors constitute the most sizable and underserved sector, the challenge of accessing investment accounts isn’t isolated to them alone. The broader UK business investment account landscape is ripe for transformation. Lightyear is actively working towards expanding its business solutions to encompass all categories of SMEs and larger startups in the forthcoming months.

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Lightyear Collaborates with BlackRock to Democratize Access to Money Market Funds for Investors

Traditionally, Money Market Funds (MMFs) have posed a challenge for UK businesses to access, as available options in the market have typically catered to large corporations with a minimum investment requirement of £1 million.

 These funds are commonly reachable through business investment accounts, which are only accessible once a certain business size is achieved. Typically, the tracking of real interest rates through MMFs has been a privilege reserved for larger enterprises.

Through its partnership with BlackRock, the world’s largest investment company in terms of assets under management, Lightyear is revolutionizing access to MMFs for both business and retail investors, eliminating the need for the conventional £1 million minimum investment criterion. 

Beyond offering a 4.5% interest rate on uninvested GBP, the platform now presents a robust avenue for UK investors to capitalize on global high interest rates through both cash holdings and investments. 

Beth Malcolm

Beth Malcolm is Scottish based Journalist at Heriot-Watt University studying French and British Sign Language. She is originally from the north west of England but is living in Edinburgh to complete her studies.