Lightyear has unveiled small business investment accounts designed specifically for freelancers and sole directors in the United Kingdom.
The investment platform aims to cater to the underserved market of small businesses, particularly those without employees, by providing them with access to investment opportunities and the ability to earn interest on their company funds, Lightyear said in a Wednesday (Aug. 23) press release emailed to PYMNTS.
Small businesses often face challenges in obtaining business accounts from large retail banks, which offer little-to-no interest and have stringent acquisition procedures, according to the release. Freelancers and sole director businesses encounter additional hurdles, as they rarely have access to such accounts and often struggle to navigate the complex process of entering the stock market.
By providing small businesses with investment accounts, Lightyear aims to help them maximize their company funds and protect against inflation eroding their cash reserves held in bank accounts, the release said.
This initiative is particularly beneficial for sole directors, who represent the largest and most underserved segment of the market, according to the release. However, Lightyear has plans to expand its business offering to all types of small- to medium-sized businesses (SMBs) and larger startups in the coming months.
To make Money Market Funds (MMFs) accessible to U.K. businesses, Lightyear has partnered with investment company BlackRock, per the release. Through this partnership, Lightyear will enable business and retail investors to access MMFs without the hefty minimum investments that are usually required. Additionally, the platform offers a 4.5% interest on uninvested British pounds, providing U.K. investors with a strong product to capitalize on global high interest rates through both cash and investments.
Lightyear Co-founder and CEO Martin Sokk said in the release that this launch addresses the gap in the business investment market. He highlighted that while the retail investment market has made progress in recent years, the business market lags behind, especially for “solopreneurs.”
A report by the Office for National Statistics showed the continuing impact of inflation in the U.K. Compared 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.
For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.