- Client: UK-based leasing company
- Loan Amount: Circa £150,000
- Facility: Unsecured VAT Loan
- Term: Three months
In this case, a well-established UK-based leasing company approached Enness after an upcoming VAT bill placed unexpected pressure on its working capital. The business needed to meet its VAT obligation while continuing to manage regular operating expenses, including payroll and other existing financial commitments.
The immediate cash flow requirement had resulted in the company becoming increasingly reliant on its existing overdraft facility. However, using the overdraft to manage a substantial tax payment was not considered a suitable longer-term solution, so the client required a short-term funding facility that could provide the necessary liquidity without placing further pressure on its day-to-day cash flow.
Enness reviewed the client's circumstances and approached suitable lenders to identify a solution that could be implemented quickly. We successfully secured an unsecured VAT loan of approximately £150,000 with a three-month repayment term.
The structure allowed the client to spread the VAT payment over the agreed three-month period rather than meeting the full liability from its available working capital at once. The lender paid the required amount directly to HMRC on behalf of the client, with the business then repaying the lender in accordance with the agreed facility.
This provided the company with greater flexibility to manage its short-term cash flow while continuing to meet its normal operating commitments. By separating the VAT payment from the company's immediate working capital requirements, the business could maintain greater control over its available cash during the funding period.
The transaction was completed in under one week, demonstrating the importance of speed when arranging short-term business finance around an upcoming tax liability. Enness was able to identify an appropriate lender and progress the facility efficiently, allowing the client to address the immediate funding requirement within the required timeframe.
This case highlights how working capital finance can help established businesses manage temporary cash flow pressures. Short-term funding can be particularly relevant where a significant VAT liability falls due at a time when available working capital is also needed for payroll, suppliers and other operational commitments.
Enness works with businesses across a range of sectors to arrange bespoke finance for short-term liquidity requirements, working capital and other business funding needs. The appropriate structure will depend on the company's circumstances, affordability and lender criteria.
If your business is facing a short-term working capital requirement or an upcoming VAT liability, speak to a finance specialist to discuss your options.
Disclaimer:
This case study is for information and illustrative purposes only and does not constitute financial, tax, legal or investment advice. Finance is subject to lender criteria, affordability and individual circumstances. Businesses should obtain appropriate professional advice regarding their tax obligations and financing requirements.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
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