VAT loans
Turn a single quarterly VAT payment into manageable instalments, so one date in the calendar stops distorting the whole cash flow.
Request a callback- Typical amount
- Size of the VAT bill
- Typical term
- 3 to 12 months
- Security
- Usually unsecured
- Speed
- Often within days
Figures are indicative market ranges at the time of writing, not offers or quotes. What is available to your business depends on the lender, your circumstances and the security available.
About vat loans
VAT is money you have collected on behalf of HMRC, but the payment date rarely lines up neatly with when your customers actually pay you. For businesses on long payment terms, the quarterly bill can land while a good chunk of the VAT it represents is still sitting in unpaid invoices.
A VAT loan settles the bill and lets you repay the funder over the following months, usually three to twelve. The liability is met on time, HMRC is paid, and the cash that would have gone out in one lump stays available for wages, stock and everything else.
It is worth being straight about the alternative. HMRC will often agree a Time to Pay arrangement, which does not carry a lender's arrangement fee, though it does carry interest and it does show up in your dealings with them. Which route is better depends on your circumstances, and we will tell you honestly if we think the free option is the sensible one.
When it earns its keep
- Customers on sixty or ninety day terms while VAT falls due on invoices raised, not paid.
- A quarter that included an unusually large sale, leaving a bill out of step with current cash.
- Seasonal businesses where the payment date falls in the quietest trading month.
- Protecting an overdraft or a working capital facility for the purpose it was arranged for.
- Avoiding a late payment to HMRC and the surcharges and scrutiny that follow one.
Keep in mind
- This is borrowing against money you already owe, so it does not improve the underlying position.
- Needing it every single quarter is a signal worth investigating rather than repeating.
- Compare the total cost against an HMRC Time to Pay arrangement before committing.
- The facility usually has to be arranged before the due date, so do not leave it to the last week.
- Missing payments on the loan creates a second problem alongside the original one.
Frequently asked
How quickly can it be arranged?
Often within a few working days, provided we have your recent bank statements and the VAT return figures. It is worth starting a week or two before the due date rather than in the final days.
Does the money go to me or to HMRC?
Usually straight to HMRC, which removes any doubt that the liability has been settled. Some funders will pay the business instead. Either way you should see confirmation that the payment has reached HMRC.
Can I fund a VAT bill I have already missed?
Sometimes, though it becomes harder and more expensive once a bill is overdue and surcharges have started. If you know a payment is going to be difficult, the time to act is before the due date, not after.
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Tell us what the money is for
A short conversation is usually enough for us to tell you what is realistic — including when the answer is that you should not borrow.
