Social lending – why should you invest as a company?

Social lending is an easy way to invest, but sooner or later most investors come to the point where the idea of starting to invest under a company becomes interesting. (Mostly after you’ve paid your first bit of income tax and seen how much that is!)

As my portfolio has gotten bigger, I’ve started to consider investing as a company as well, since the amount of money you save on taxes is impressive.

Overall there are two main benefits and two main downsides and upsides of investing as a company:


– You can postpone paying taxes until you want to take out the money from your business in dividends. (Essentially pre-tax money gets to grow in peace.)

– You can charge off defaulted loans that are showing no recovery, thus lessening your tax burden even further.


– The way Bondora and others handle¬†data reporting right now doesn’t work too well in terms of the info you need for accounting.

– There is no standard for how to report Bondora investments, finding a bookkeeper might be difficult and learning the reporting yourself might be time consuming.

Real numbers based on my portfolio

The numbers speak for themselves though, and Krista, who runs an accounting focused blog in Estonian calculated sample returns based off my portfolio, so that’s food for thought. Go look at the numbers to see the difference. (Spoiler: I’d have increased my earnings by more than 40% if I’d invested pre-tax earnings as a company.)