Paying your VAT bill on time is a legal obligation for VAT-registered businesses, but it can often strain cash flow. A VAT loan is a short-term finance solution designed to help businesses pay their VAT liability to HMRC without disrupting day-to-day operations.
Fundrocket’s VAT loans provide the funds to cover your VAT bill, which is then repaid in manageable monthly installments over 3, 6, 9, or 12 months. This ensures you stay compliant with tax regulations while keeping your working capital intact for other priorities, such as investing in growth or covering operational expenses.
Managing quarterly VAT payments can lead to a “cash flow shock” for many businesses. Fundrocket’s VAT loans help alleviate this burden by:
Avoiding Penalties: Prevent late payment penalties and surcharges by ensuring timely VAT payments.
Improving Cash Flow: pread the cost of your VAT bill into manageable installments.
Maintaining Flexibility: Retain working capitalfor other essential expenses or investments.
Whether your cash flow is affected by seasonal demand, delayed invoice payments, or unforeseen circumstances, a VAT loan offers the financial security to navigate these challenges.
To qualify for a VAT loan, businesses typically need to meet the following criteria:
1
VAT Registration: The business must be VAT-registered with a VAT number.
2
Turnover Threshold: Annual turnover must exceed £85,000 (excluding VAT).
3
Business Type: Usually open to limited companies, although partnerships and some sole traders may also qualify.
4
Trading History: The business must have been trading for at least one year.
5
Creditworthiness: A standard credit check and review of the business’s financial situation are required.
A VAT bridging loan is a specialized solution designed to cover VAT liabilities during specific transactions, such as commercial property purchases. These loans are particularly useful when VAT costs arise unexpectedly late in the process. With bridging loans, businesses can ensure transaction completion without incurring financial strain.
Cash Accounting Method
Only includes paid invoices, helping businesses manage cash flow more effectively.
Standard Method
Based on all sales and purchases during the accounting period, regardless of payment status.
Flat Rate Scheme
Simplifies VAT calculations for small businesses, applying a fixed percentage based on the type of business.
Failure to pay VAT on time can result in significant penalties, surcharges, and interest charges. These penalties can escalate quickly and affect your financial stability. By taking out a VAT loan, you can avoid these costs while spreading your tax obligation into manageable payments.
To be eligible for a VAT loan, businesses must:
1
Be VAT-registered with a valid VAT number.
2
Have a turnover exceeding £85,000 per year (ex-VAT).
3
Be a UK-based business.
4
Have been trading for at least one year.
5
Meet standard creditworthiness requirements.
VAT Charged
The tax you collect on goods and services sold to customers.
VAT Paid
The tax you pay on purchases for your business.
A manufacturing company faces a £50,000 VAT bill due at the end of the quarter but needs its cash flow to invest in new machinery. They secure a nine-month VAT loan through Fundrocket, ensuring HMRC receives payment on time while repaying the loan in affordable monthly installments.
Fundrocket VAT loans offer competitive rates:
Interest rates as low as 2.9% for three-month terms.
Flexible repayment terms tailored to your business’s needs.
No hidden fees—what you see is what you pay.
