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VAT Loans Explained

VAT Loans for Your Business

If your organisation is struggling with cashflow when VAT is due to be paid, or you would rather keep that cash in the bank where it could fuel growth or cover unforeseen costs, you might choose to apply for a VAT loan.

"It was great working with Bluestone to fund our VAT bill - they have been helpful and supportive to our requirements. The process has been easy and it's one less thing for the business to have to worry about."
Miranda Jules, Admin Director, G2 Studio

The benefits of a VAT Loan

  • Ensures that HMRC receive their payment in full and on time, helping your organisation to avoid late payment penalties.
  • It can prevent you from parting with a large chunk of cash that could be put to better use, i.e., to be invested in growth. 
  • Loan repayments can be made on a monthly basis rather than making quarterly VAT payments which can help to maintain a healthy cashflow. 
  • They do not use existing banking or credit facilities and may be arranged as ‘rolling’ or drawdown borrowing (subject to eligibility). This allows the borrower to use loan funds on a fluctuating basis.

VAT Loans explained with our Loans Specialist, James Lewis

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VAT Loans

How do VAT Loans work?

The amount a business can borrow will depend on the unique circumstances of the business and eligibility. In addition to credit checks and a review of the business’s financial situation, other eligibility criteria will usually apply, often including:

  • The business is VAT registered
  • Turnover is more than £85,000 ex-VAT
  • UK organisation
  • Usually a limited company, although partnerships and some sole traders may also qualify
  • Trading for more than one year.
VAT loans discussion - Women actively explaining ideas and concepts while collaborating around a whiteboard.
VAT loans for engineering - A skilled mechanical engineer measuring a sheet of metal, illustrating the relevance of VAT loans in the industry.
Eligibility

Is a VAT Loan right for your business?

It is important to make you aware of all aspects of a VAT Loans so you can understand if it is the right fit for your business.

 When should you get in touch?
  • VAT loans cannot be used to pay other tax liabilities such as corporation tax, although it is possible to obtain a loan to cover corporation tax bills.
  • Interest will be applied to a VAT loan, so while the payments will be spread over a longer period of time, your organisation will pay more overall.
  • If you fail to keep up repayments on your loan, your credit score and future finance applications could be impacted.

We would recommend getting in touch with Bluestone up to three months before your VAT deadline is due for more complex cases. However, we can look to provide finance within a few weeks for simple cases.

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Get in touch with us

30 years of arranging bespoke commercial finance

At Bluestone, we understand that applying for a self-assessment loan can be a daunting process, especially if you're unfamiliar with the requirements and criteria. That's why we're here to support you every step of the way.

You’ll deal directly with our business loan specialist, James Lewis, who’ll support you every step of the way.

James has years of experience helping individuals like you secure the funding they need to cover their self-assessment tax bills.

He'll work closely with you to understand your specific requirements and provide you with a range of financing options tailored to your needs.

Contact James today

You can contact our Loans Specialist, James Lewis at james.lewis@bluestone.app.

Alternatively, visit his page to book a meeting.

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Need to pay a VAT bill?

Spread the cost with a VAT loan with Bluestone.

VAT Loans

Frequently Asked Questions

Are there any fees or charges associated with VAT loans, and if so, can you provide an estimate of these costs?

There may be fees associated with a VAT loan, such as origination fees, documentation fees, and interest charges. These fees will vary depending on the lender and the loan product being offered. We would be happy to provide an estimate of the costs based on your specific needs and circumstances. Contact us to find out more.

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BS.202507.01FAQ96

What is the typical repayment period for a VAT bill loan, and how does it impact my cash flow and financial statements?

The repayment period for a VAT bill loan will depend on the loan amount and the repayment schedule agreed upon with the lender. The loan can typically be structured to match the timing of the VAT payments, helping to minimise the impact on the organisation's cash flow.

BS.202311.01FAQ75

Are there any specific requirements for organisation's to be eligible for a VAT bill loan in the UK, and how do I determine if my organisation qualifies?

To be eligible for a VAT bill loan in the UK, an organisation typically needs to be VAT registered and have a good credit history. The specific requirements may vary depending on the lender and the loan product being offered.

BS.202311.01FAQ15

How does a VAT bill loan benefit my organisation, and what advantages does it offer compared to other financing options?

A VAT bill loan benefits an organisation by providing quick and flexible access to working capital to help manage cash flow during periods of increased VAT payments. This type of loan can also help organisations avoid having to dip into their operating funds to pay VAT bills, preserving those funds for other important organisation needs.

BS.202311.01FAQ43

Can you explain the concept of a VAT bill loan and how it differs from other types of financing options in the UK?

A VAT loan is a financing option that enables organisations in the UK to borrow against their outstanding VAT bills. This type of loan provides a source of working capital to help organisations manage the cash flow impact of paying large VAT bills.

BS.202311.02FAQ27

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We know finance can be complex and often it's easier to talk things through. Drop us a message or give us a call 0330 135 8660 and we'll get back to you ASAP.

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