VAT Loan guide

VAT Loans: A guide

Are you new to VAT loans? And perhaps would like to gain a better understanding on how they work before going any further? Then look no further. Have a read of the short guide below to find out everything you need to know about VAT Loans in just under 5 minutes.

Can a UK company finance a VAT Bill?


Yes, there are specialist finance companies that will finance a VAT bill.


What is the minimum VAT bill amount that can be financed?


Normally, most Guides to financing a VAT Bill finance companies will start at £5,000. Theoretically, there is no maximum. To give you a rough idea, our average VAT loan amount is £60,000.


How easy is it to get credit cleared?


The process is quick and simple. You will need to show a copy of your VAT bill and a full set of your latest audited accounts. Often, the underwriters will need to see management accounts and three months bank statements to support the application.


Do we have to provide a personal guarantee for VAT loans?


More often than not, you will not need to offer a personal guarantee.


Who makes the payment to HMRC?


Just to make your life that bit easier, once you have signed the loan agreement, our funder will send the money directly to HMRC using your VAT number as a reference code. HMRC are all OK with this.


How much interest do we pay and how do we calculate the monthly repayments?


Please click here to visit our VAT calculator. Enter your VAT bill amount and the VAT calculator will work out the monthly repayment and total repayments. We do not collect your information, its free to use.

When do we start to make the loan repayments?


Most companies opt to repay the VAT loan over three months, the first month’s payment coming out 30 days after HMRC have been paid.


Why finance a VAT loan?


VAT loans are a multi-million-pound business in the UK. Previously, they were exclusively used by accountants and solicitors, now all sorts of companies fund their quarterly VAT payments. As to why, there are many reasons. Just to name a few: Investment into stock, financing work in progress, allowing clients to have extended payment terms, using VAT money internally to fund other projects.


Finally, for some companies it is cheaper than paying a late interest fine to HMRC.


What will HMRC think if we use a finance company to pay the VAT bill?


Nothing, they do not mind at all. All they see is the VAT bill is settled in full and on time.


Does undertaking a VAT loan affect my company credit rating?




What level of bad debt do you see as a finance company?


Bad debt is relatively low. Companies who use a VAT loan facility want to pay HMRC what is owed. Therefore, they do not wish for the aggravation of paying late. Companies are confident they will be in business in three months, otherwise, why just do not pay the bill in the first place.


How do I apply for a VAT Loan?


Speak to a member of the VAT Loans team today on 01494 956 871, or email [email protected] to discuss getting a VAT loan for your business, or for more information on our VAT Loans guide.