Without cash coming in and flowing out, growth and success can be extremely difficult to achieve. One issue that many business owners face is managing their VAT payments and ensuring they have enough cash to cover them. This is where VAT loans can come in handy. In this blog post, we’ll take a closer look at VAT loans, why they can be useful, and how to use them to optimise your cash flow.

Why are VAT loans useful?

There are a number of reasons why VAT loans can be helpful for businesses. Firstly, they can provide the cash needed to cover VAT payments. This allows businesses to avoid penalties and fees for late payment. Secondly, VAT loans can help businesses to manage cash flow more effectively. This is done by spreading the cost of VAT payments over a period of time. This can help to free up cash for other business operations and investment. Finally, VAT loans can be a useful tool for businesses that are going through a period of growth or expansion, allowing them to manage their cash flow more effectively.

How do you use VAT loans to optimise cash flow?

To optimise your cash flow using VAT loans, it’s important to plan ahead and understand your VAT payment schedule. This will enable you to identify periods where cash flow may be tight and plan accordingly. When applying for a VAT loan, it’s important to shop around to find the best deal. Therefore take into account interest rates, fees, and repayment terms. It’s also important to ensure that you have the ability to make the loan repayments on time and that borrowing won’t put undue pressure on your cash flow.

It’s worth noting that VAT loans shouldn’t be seen as a long-term finance solution. They are however designed to help businesses manage short-term cash flow issues and should be used as such. It’s important to re-evaluate your cash flow regularly and take steps to improve it where possible.

VAT loans can be a useful tool for businesses looking to optimise their cash flow. By providing the cash needed to cover VAT payments and spreading the cost over a period of time, businesses can free up cash for other operations and investments. However, it’s important to plan ahead, and ensure that borrowing won’t put undue pressure on your cash flow. VAT loans are a short-term finance solution and should be used as such. If you would like more information on how to use VAT Loans to optimise cash flow then please contact us.

One way smaller businesses can acquire necessary funds is through Value Added Tax (VAT) loans. VAT loans are designed to alleviate the cash flow constraints caused by VAT payment delays by the government. These loans offer a convenient way for businesses to address short-term financial complications and help maintain a steady cash flow. In this blog post, we will explore why VAT loans are vital for the growth of small businesses.

1. Helps to Keep Cash Flows Steady

Small businesses can suffer from inconsistent cash flow, with buying inventory or paying staff on time becoming a challenge. With VAT loans, businesses can keep their cash flows consistent and improve their financial stability. These loans are therefore designed to help businesses manage payments by offering a cash advance ahead of their VAT payments. This allows businesses to take care of bills and expenses, and avoid late payments and penalties.

2. Offers Flexible Repayment Options

One of the most significant benefits of VAT loans is their flexibility. Businesses can therefore choose to repay VAT loans over a few months to up to a year. This offers businesses the ability to make repayments in a manageable and practical fashion. The repayment plans for VAT loans can be tailor-made to fit the specific needs of the business. This allows businesses to regain control of their finances without incurring additional debt.

3. Boosts Growth and Expansion

VAT loans are specifically designed to help small businesses improve their cash flow and help them grow. They are not designed with only short-term loans in mind; the loans are intended to help businesses expand and succeed in the long-term. When businesses can manage their finances better, it allows them to invest in new machinery or equipment, which in turn helps increase productivity, improves speed of service, and reduces downtime. This can lead to increased revenue and profits.

4. Could save Money in the Long Run

By taking advantage of a VAT loan, businesses can save money. Late payments of VAT attract a penalty from HM Revenue & Customs, further putting a strain on cash flow. A loan will help the business pay the VAT on time, avoiding the late payment fees and interest rates. This means businesses can spend more time focusing on growth and development rather than worrying about how to settle their obligations for orders delivered or services rendered.

In conclusion, VAT loans offer a practical and efficient way for small businesses to manage their finances better. VAT loans provide flexibility and convenience that is not offered by traditional bank loans. If you would like more information on why VAT loans are vital for the growth of small businesses then please get in touch.

Managing financials is one of the most crucial aspects that you need to take care of when running a business to ensure the smooth running of your enterprise. And among all financial aspects, Value Added Tax (VAT) can be quite confusing for you, especially if your business operates in different countries and regions. However, if you need cash for your VAT obligations, VAT loans can be an excellent solution. The ultimate VAT loan checklist for businesses below will help you get started.

1. Understand What Is VAT

The first step towards taking a VAT loan is to understand the tax and its implications. Value Added Tax, as the name suggests, is a tax added at each stage of production and distribution. The final consumer pays for it, but businesses collect it on behalf of the government and claim back the VAT they’ve paid on their input. The percentage of VAT may vary depending on many factors such as the products or services types or the country where your business is located.

2. Evaluate Your VAT Obligations

The next step is to evaluate your VAT obligations. If your enterprise is small and has a low VAT threshold, you may not need to collect VAT. Ensure that you hire a skilled VAT expert who can review your VAT obligations and provide you with personalised guidance.

3. Check Your Financial Health

Lenders use your financial statements and cash flow projections to determine if you are eligible for a VAT loan. So, make sure that your financial records are in order and up-to-date. Besides, monitoring your financial health regularly will help you identify potential issues and give you time to take corrective measures.

4. Find the Right Lender

When looking for a VAT loan, you need to find a suitable lender who understands your financial needs and has flexible repayment terms to match your cash flow cycle. You can compare the different VAT loan rates, fees, and lending conditions offered by various lenders. Additionally, you can talk to your accountant, business partners, or other entrepreneurs to get recommendations.

5. Remember to Claim Back Your VAT

After receiving a VAT loan, you need to keep track of VAT payments carefully. Ensure that you submit timely VAT returns and claim back the VAT you paid on your inputs. This will help improve your cash flow and lower your finance costs.

VAT loans can help you secure cash to cover your VAT obligations, but make sure that you understand your VAT obligations, check your financial health, find the right lender, and remember to claim back your VAT. If you would like more information on the ultimate VAT loan checklist for businesses then please get in touch.

Did you know that VAT loans can provide significant financial support when it comes to managing your business’s cash flow? As a form of short-term financing, VAT loans can help you boost your cash reserves. It also helps pay your bills on time and take advantage of new opportunities without impacting your bottom line. In today’s blog, we will discuss everything you need to know about how VAT loans can help your business thrive.

What is a VAT loan?

A VAT loan is a type of short-term financing that helps businesses finance their VAT obligations. It is a loan based on a business’s future VAT returns, which the lender will advance to the business owner. This type of loan can be useful to businesses that struggle with cash flow issues. It enables them to manage their cash effectively and avoid any penalties incurred due to missed VAT payments.

How does it work?

A VAT loan works similarly to other types of loans, albeit with a few distinct differences. When a business applies for a VAT loan, the lender will assess the business’s VAT return and its likelihood of repayment. Once approved, the lender will typically advance the business owner up to 80% of their anticipated VAT return. The business owner can then use the loan to pay their bills and manage their cash flow effectively.

What are the benefits of VAT loans?

One of the primary benefits of VAT loans is that they can be used to manage a business’s cash flow effectively. As mentioned above, the loan allows the business owner to pay their bills and meet their financial obligations on time. Additionally, VAT loans provide an opportunity for businesses to take advantage of new opportunities without worrying about cash flow restrictions.

Are there any risks involved?

As with any type of loan, there are risks involved with VAT loans. One potential risk is that you may incur additional fees and charges if you do not repay the loan on time. Additionally, if your VAT return is less than anticipated, you may not be able to repay the loan in full, which could lead to further financial difficulties.

In conclusion, VAT loans can be an invaluable tool for businesses that want to manage their cash flow effectively. They provide an opportunity to pay bills on time, take advantage of new opportunities and avoid penalties incurred due to missed VAT payments. However, it is important to consider the risks involved before applying for a VAT loan. If you would like more information on how VAT loans can help your business thrive then please contact us today.

VAT and Corporation Tax funding for companies is nothing new. As a multi-million-pound business in the UK, there are thousands of solicitors, accountants and architects already using this service. However, this “funding” product has not found its way into the mainstream for SMEs that make up the heart of British business.

How can these small and medium sized companies, and even larger ones if required, fund their VAT and Corporation Tax?

The first option could be a bank loan. Plenty has been written about why banks are not lending. The time it takes to apply for a bank loan, or the fees associated with it.

Second are Peer to Peer lenders and other specialist companies that will loan a business money. They will always ask for a personal guarantee. You may even find your details in the public domain, as they post your details on a portal raising money from the public at large. Whilst this can be an option, it is not always the simplest and quickest solution for your company.

Logic dictates that most companies who are running an accounting system will know at any time what their VAT liability is. Hence, they should have no need to borrow to finance an HMRC bill. The reality proves that this assumption is not the case for several reasons we will highlight later.

So, why do companies look to fund their VAT and Corporation Tax liability?

Companies will often set aside their VAT / Tax money with the intention of paying it on the last day possible. Funding this money instead allows you to invest in other projects without having to speak to your bank.

Clients sometimes find themselves in a position where they have raised a sales invoice but not yet received the corresponding purchase invoice from a supplier. This can artificially increase their VAT liability for a quarter.

Many accountants and solicitors find themselves raising invoices for work completed, but then must wait a long time to be paid. Many other types of companies also find themselves in this same situation.

With regards to Corporation Tax, sometimes the bill bears no resemblance to the actual cash position of the company. Especially since the bill becomes due nine months after the year end. Spreading the payment over the next year can be highly beneficial.

Loans are available from £8,000 and can be repaid over three to twelve months. You can pay the first direct debit immediately. Or you can choose to delay it until one month after HMRC have been paid.

Contact Us

For more information on VAT and Corporation Tax funding or for a free no obligation quote, please give a member of the VAT Loans team a call on 01494 956 871 or email us on [email protected].