Applying for a bank loan can be a time consuming and arduous process. Their lending policy may not easily work if you only wish to borrow £8,000 over a three-month term. In this blog we will be asking the question of how do HMRC Loans work to give you the ultimate guide into understanding the process behind them.
For UK companies who may not have the cash to pay their VAT bill, and are potentially looking at a 15% fine from HMRC, help may be at hand. Interestingly, there are many reasons why companies use tax funding companies like WestWon.
This business is built upon our completing many loans – all short term between three months and one year in repayment duration. The profit per loan is small – there are no documentation fees or hidden extras that many banks charge to make their profit. We rely on a quick and simple system. Clear documentation will allow you, the customer, to make a decision without a fear of “what is the catch.”
We need the following information
- How much are you looking to borrow? (£8,000 to over £1m)
- How long do you wish the loan repayment to last? (Three months to one year)
- Would you like to pay your first direct debit repayment before HMRC are paid, or shall we delay it for a month? (Most companies request the one month delay)
- The name of your company and contact information.
Once we have this, we will conduct a few quick searches on financial information in the public domain. We will give a good indication as to “yes” or “no” often within minutes, subject to a full approval.
Personal guarantees of the main shareholding directors are always needed for these HMRC tax funding loans. It makes sense from a loan provider’s perspective as being more secure. You are saying that you believe your company will still be trading in three to twelve months. If you were to pay the HMRC bill from the company’s cash reserves, and you did stop trading; technically, you are no worse off other than the interest you have paid. We will ask for your permission to undertake a personal search on you.
Full underwriting will take up to 48 hours. For many companies, this will be quicker.
What happens next?
The agreement is then emailed to you. Then, it is a simple case of signing the paperwork and returning it to WestWon. We will also ask you to confirm the date you would like us to pay HMRC. Most companies will ask for the HMRC payment to be made up to three days before the bill is due. Thus avoiding any fine for late payment. Most clients also request the first direct debit payment to be deferred for a month after the tax bill has been paid.
All documentation is on our secure portal. Our Tax Funding team is on hand to answer any questions you may have.
HMRC are happy, and we will have paid your tax liability on time directly to them.
If you would like more information on how do HMRC Loans work, then head over to our contact page on our website to speak to a member of our team. Furthermore, if you would like to talk to us over the phone then please call 01494 956 871 or email [email protected].