Property VAT Loans

Finance VAT on a commercial property

When you are buying a commercial property, the selling agent’s details will clearly say ‘VAT will not be applicable’ or the asking price +VAT.

If you have found a commercial property for sale and VAT is payable, then one of the first things to think about is how to fund the VAT?

VAT on the purchase and sale of a property is payable upon completion. Even if you set up an SPV, once you have completed the documentation, and HMRC have done their checks, HMRC will send the VAT money back to you. Therefore this process can take from a few weeks to six months.

With most commercial properties being acquired via a mortgage, the first thing to realise is that the mortgage company will not fund the VAT. However what other options are there available to you?

• Pay the VAT yourself and then reclaim it.
• Take out a commercial property VAT loan through us.

Can you finance VAT on a commercial property?

Yes, read on and we will tell you how.

So, how does it work?

The process of applying and obtaining a VAT loan is very simple.

Here is what we will need from you:

• The property and solicitor details
• The amount you are looking to borrow
• Accounts, bank statements, details of the borrower etc

Once we have this information, we look to obtain a credit acceptance. This is normally a three or four-day process.

When you are nearer to completion, you sign a simple loan agreement and appoint our funder as your agent when dealing with HMRC on this transaction.

The funder then sends the VAT loan monies directly to your solicitors who then in turn transfers this money to the buyers’ solicitors.

Then HMRC will receive this VAT money, complete some checks, and therefore then send the money directly back to our funder acting as agent.

What are the costs?

The funder will charge daily interest. Their loan agreement is normally open ended up to six months. However most customers will have terminated the loan agreement earlier as and when HMRC return the VAT money.

There is a 3% facility fee to be paid and the agreement has to be for a minimum term of three months. Interest can be paid either weekly or monthly.

What are the benefits?

• You only pay interest for the days the loan is outstanding, subject to a minimum three-month term
• We are a third-party funder, this has no impact on your mortgage
• You do not have to use existing cash flow to fund a one off investment

The VAT Loan Calculator

We are buying the property via our company, not a SPV. How does the VAT work?

We can still organise a commercial property VAT loan. The process is much the same as above, our funder would still send the VAT money directly to your solicitor. The key difference is that you will either get a VAT refund or repay the VAT loan when your VAT quarter ends.

Funders and finance companies who fund VAT on the purchase of an office, shop, or warehouse

In the UK, there are a small number of funders and finance companies that will fund VAT on the purchase of a business building such as an office, shop, or warehouse.

At VAT Loans, we work with a small panel of funders to get the best possible rates for you. However, it may be that one funder has turned you down for credit. We have seen this many times, often not for reasons associated with a customer’s credit profile. However, it may be they do not like the building or purpose the building will be used for.

Contact us today for more information on your commercial property VAT funding needs

Please call a member of our team on 01494 956 871, or email us at hello@vatloans.co.uk.

It’s roughly a 50%/50% between commercial property that attracts VAT and those that don’t. It’s mostly the newer properties where you have to pay VAT.

The Property VAT Loan Process

Property vat loan process

Cash Flow

Opting for a VAT loan amongst our other finance options will allow you to keep funds in your business to be used elsewhere. Take control of your finances and free up your cash for you to use in other important areas of your business.

Alternative Funding Lines

No need to use up an existing bank facility. A VAT Loan gives you alternate options to use in order to finance your loans.

Fast Payment

Payment can be made directly to HMRC to ensure your bill is paid on time. This will save you worrying about your finances when it comes to financial deadlines.

Quick and Simple to Arrange

Simple use of our free to use calculator can give you a quote in a matter of seconds. Alternatively, you can give us a call on 01494 956 871.

Fixed Monthly Payments

Easy fixed repayment schedule with industry leading rates.

Approval Within 24 Hours

VAT Loans prides itself on fast and quality customer service, which is why we aim to have a decision to you in the first 24 hours of enquiry.