Introduction
Investment app Lightyear is introducing UK business investment accounts, allowing sole director companies to invest in stocks, funds, and ETFs on the same terms as retail customers. Along with the new accounts, Lightyear has partnered with asset manager BlackRock, making its money market funds available to business customers.
The Changing Landscape
In the past, cash was considered a liability for businesses in Europe. However, the situation has now changed. Money market funds, which invest in cash, cash equivalents, and short-term debt securities, are an attractive cash management solution for larger corporates due to their low risk and high liquidity. Traditionally, these funds had high fees or required minimum investments in the millions or tens of millions, making them inaccessible to most businesses.
Access to Money Market Funds
Lightyear’s new business investment accounts allow companies to access money market funds at an annual fee ranging from 0.09% to 0.30%. This opens up investment opportunities for businesses and provides them with the benefits of cash management solutions without the high costs.
Competing with Banks
While Lightyear competes with retail investment platforms like Hargreaves Lansdown and Freetrade, it sees banks as its main competitors in the business investment space. Lightyear CEO Martin Sokk acknowledges that many businesses already keep their money in banks, and Lightyear aims to provide them with a more attractive investment option.
Future Plans
Currently targeting sole director businesses, Lightyear plans to expand its support to multi-user and larger businesses in the coming months. This expansion will further enhance the accessibility of business investment accounts and broaden Lightyear’s customer base.
