Managing cash flow effectively is crucial for any business, and VAT liabilities can often put significant pressure on working capital. Using a finance broker like Credo can be the key to ensuring smooth financial operations, securing necessary funding in time, and ultimately keeping businesses moving forward.
How we helped a family-run business
For the past two years, we have assisted a family-run business specialising in materials handling equipment solutions with VAT loans. In December, they faced a VAT liability of £162K, choosing to fund £100K themselves while requesting a £62K VAT loan. We acted fast to ensure they received the funds quickly and efficiently, keeping their business operations running smoothly.
Recently, the same business encountered another VAT liability of £132K and sought to fund the full amount through a loan. However, complications arose when the lender required confirmation that PAYE liabilities were up to date. Our client was unfortunately in arrears with no formal arrangement to pay and combined with an increased loan request and a high overdraft facility (renewed in February for six months), underwriters initially declined the application.
Going the extra mile to secure funding
Understanding the urgency of the situation, we worked closely with the lender on an appeal. Our proactive approach included:
- Providing clear explanations to address underwriter concerns.
- Assisting the customer in preparing a detailed sales forecast for incoming equipment orders and projected profit.
- Encouraging the customer to make a payment toward the outstanding PAYE liability and commit to having it up to date within the month.
Thanks to our strong relationship with the lender, their underwriter went above and beyond, even staying late on Friday with us to ensure the loan was approved and the payment was processed.
At 6:15 PM, we received confirmation that the funds had been released, allowing our client to pay HMRC and enjoy their weekend stress-free!
Why choose a Finance Broker for VAT loans?
VAT loans are a valuable tool for businesses looking to maintain cash flow, allowing them to retain working capital for growth and investment. With our expertise:
Flexibility: Businesses can choose to fund the full VAT amount or a portion, depending on their financial strategy.
Speed & Efficiency: Our relationships with lenders help us navigate complex approvals and secure funding quickly.
Problem-Solving: We work closely with both businesses and lenders to overcome obstacles, ensuring a higher success rate for loan approvals.
If your business is facing a VAT liability and you want a smooth, stress-free funding experience, reach out to us today. We’re here to help keep your cash flow healthy and your business moving forwards!
