Below is a case study about a client of ours who organised, and continues to organise, a short term loan with us to pay their VAT bill. In our VAT Loans case study we discuss who they are. We also discuss why they chose to organise a loan and why they decided to undertake it with us. The information collected came directly from the Finance Director. This is so that we can offer the best information and advice to you. If you and your business are thinking of organising a VAT Loan for your next VAT bill, then please don’t hesitate to contact us. A member of our friendly team will be more than happy to help.
A bit about them
We have been working with this company since 2012. However, their journey started in 2003 when they started trading. They are a mid sized firm of architects and so far we have arranged four short term loans for them every year. As we have been doing this for many years now, we have developed a strong relationship with many of the employees and will continue to develop these over the next many years working with them.
The four short term loans we have been providing have been used to cover both their quarterly VAT bill and their HMRC Corporation Tax. For the VAT bill the repayment term is always 3 months. However, we usually defer the first repayment for a month after when the bill was paid. For the Corporation Tax loans they were mixed. One was repayable over 6 months and another 2 were over a 1 year period.
Comparing HMRC VAT Loans to a bank loan
In this case, a bank loan would actually work out to be cheaper. This is therefore a very viable option for our client to take. However, there are a few challenges that comes with this. They charge a one off administration fee, usually 1% of the loan amount. The same applies for an overdraft. There is also a mountain of paperwork as well as an increase in the time it would take to organise it. But the real reason our client chose to go through us here at VAT Loans was so that they could have an alternative funding line. This means they wouldn’t have to use up an existing bank facility. Going back to a bank manager every quarter can send the wrong message as well. We also take care of all the admin for you. We pay HMRC directly so there is no stress on your behalf.
Paying your bills on time
Like any other business in any other sector, this firm of Architects want and need to pay their VAT bills on time. Their business is profitable and they are looking to expand soon. As shown above, they are a very successful business, which is why even they are open to using short-term VAT loans. They are using it to build on their successes as opposed to a loan term financial planning issue. Their view on the situation is that it is cheaper than receiving a fine. This is as well as being much simpler and more flexible than a bank loan. Therefore, for all the reasons above, we hope to continue working with them long into the future!
If you would like more information on our VAT Loans Case Study, 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].