VAT Loans

Enness will start by discussing your needs and understanding more about your situation and how much VAT you are eligible to pay. It’s important to note that VAT financing is a solution to a short-term cash flow issue. Lenders will want to ensure that you have a healthy business that generates good revenue and that you turn a profit. You will also need to satisfy lenders that you want a cash flow solution rather than provide a 'quick fix' to a more critical problem in the business or shift debt around. 

When Enness understands your needs, your broker will then contact specialist lenders in the space. Enness knows all the providers of high-value VAT lending, and they will go straight to the source of the best rates and terms. Your broker will operate quickly, and you can expect deals in 24-48 hours. 

Given you may have a VAT invoice that needs to be paid when you start considering this type of finance, time is often of the essence. These deals can be completed quickly, and Enness will also ensure that things move at pace. When the deal is negotiated and terms are signed, your lender can settle your invoices directly with HMRC in as little as a few days or a week.

For £1m plus deals, lenders will assess you individually and rates will vary from lender to lender. The interest rate you are offered, and the cost of VAT finance will vary significantly depending on how much you are borrowing, how long you are borrowing for, and the terms you are hoping to negotiate.

VAT finance is available for businesses of all sizes and there are relatively few restrictions on the y businesses that can borrow. You will be able to access VAT finance as long as you are VAT-registered in the UK and your business is in good financial standing, has a good credit history and solid income and cash flow projections that support borrowing.

VAT finance is available at almost any size as some lenders offer loans of just a few thousand pounds to cover a VAT obligation. Successful small and medium enterprises (SMEs) tend to require loans around the £50,000 mark, but it’s equally possible for larger businesses with more significant liabilities to access loans of £1 million or more. Enness can arrange VAT loans for any amount over £50,000.

In principle, all VAT-registered businesses can apply for a VAT loan. The lenders that offer this type of finance tend to operate in specific parts of the market – some players will offer SMEs smaller loans at larger volumes, and other lenders work with bigger companies, writing just a few, very significant loans each year.

Many sucessful businesses chose to use VAT finance as a way to optimise and manage their cash flow as effectively as possible. 

By opting to raise finance to settle their VAT liability, businesses can effectively keep working capital available within the company.

The VAT loan is effectively paid off in monthly installments, which is easier to manage from a cash flow and accounting perspective than it is to pay off the liability as a single lump sum. 

Enness can arrange these loans quickly and the rates are often very competitive when considering the advantages of retaining capital within the business for higher-ROI projects or investments, or simply to ensure the business retains enough working capital reserves.

Most lenders in the VAT loan space specialise in granting relatively small loans to small and medium-sized businesses. As a result, these lenders’ processes, risk analysis, rates and terms are set up for high-volume, low-cost deals. Many of these lenders will baulk at offering a high-value loan.

Enness are expert negotiators of high-value VAT financing, and they have access to all the specialist lenders in the space. You will find that a broker like Enness will open doors, and you will have access to more advantageous rates.