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If you’re looking to purchase a property at auction – perhaps to refurbish, or to acquire the land to build upon – then you may need finance to complete the transaction.
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When you run a business, tax liabilities are part of the annual cost cycle and must be met in a timely way to avoid costly fees. Businesses typically submit their VAT return to HMRC on a quarterly basis, even if they have no VAT due to pay or reclaim. However, unexpected bills do happen and these surprise costs can be detrimental to businesses. VAT loans can help businesses to obtain short-term finance in order to meet their tax obligations and to free up cash.
Businesses sometimes use a VAT bridging loan as a short-term means of spreading a VAT bill and improving the company cash flow in the process. By doing this, they can focus on delivering their underlying strategy for growth, competitiveness and/or expansion, whilst implementing a longer-term arrangement to pay all VAT monies due.
Businesses that do owe VAT to HMRC can choose how they pay it. Some pay their tax bill annually or bi-annually, but most will finance every new quarter’s VAT bill across the year in order to better profile their costs.
VAT loans, also known as VAT funding, are a form of business finance used to meet the cost of VAT bills and to avoid – or reduce – the cost of fines levied by HMRC for late payment. They are a useful finance product for businesses who wish to retain access to their cash flow for business purposes.
Simply tell us what your VAT liability is, and provide some basic information for us to engage with our panel of lenders. We will provide you with a tailored illustration which tells you how much the repayments will be. Many clients choose to draw down their funds each quarter in order to free up essential cash flow. Usually, lenders will also pay the funds directly to HMRC under the client’s name.
Hank Zarihs Associates are a specieralist brokers of VAT bridging loans, bounce back loans and other kinds of specialist business finance. We work with a tried and trusted panel of special business finance lenders to provide access to VAT funding at the best possible rates. Some of the reasons to use Hank Zarihs Associates are:
As an experienced financial intermediary, we are in a position to submit applications for our clients that stand the best chance of gaining rapid acceptance from lenders. We use our knowledge, experience and business processes to save our clients time and hassle by taking on the administration for them.
We are extremely fast and efficient – leveraging our finance panel relationships and processes to obtain finance and other forms of business loan for clients in the shortest possible amount of time.
Our comprehensive lending panel often provides us with rates that are not available directly on the market. This is because we are able to work quickly and efficiently – allowing funders to pass on their cost savings in the form of better rates. We also ensure complete transparency on all costs and features of available loans, so that our clients can be confident of taking out the right product for their needs.
Trust is at the heart of everything we do, and the team at Hank Zarihs Associates works hard to develop productive, long-term relationships that maximise value over time. We are proud that many of our clients use us time and time again for their business loans; trusting us to find the specialist business finance products that they need to thrive and grow.
Ready to apply for VAT bridging finance? We work with a tried and trusted panel of VAT lenders who are actively lending. The deals that we can recommend to our clients are updated daily, so you have complete peace of mind that you are receiving details of the best possible VAT finance product on the market in real-time.
We recommend that you try out our bridging loan calculator to give you an idea of what you could be eligible for and how much your finance could cost.
VAT finance provide rapid access to bridging finance to meet tax liabilities and to avoid expensive penalties.
Apply for commercial development One of the main challenges with the VAT return is that it can be difficult for businesses to accurately anticipate their tax liabilities. By having access to a VAT bridging loan facility, those businesses can retain a healthy cash flow for their strategic activities – allowing them to keep delivering, growing and satisfying customers to secure the long-term health of the business.
Many businesses simply won’t have large reserves of cash sitting in an account on the off-chance that HMRC provides a bigger bill than usual! Access to VAT finance is a convenient, fast way to meet tax obligations whilst allowing the business to function in the best possible way.
Bridging finance is another form of specialist short-term finance designed to ‘bridge’ the funding gap between a sale and purchase. Our panel of lenders offer extremely fast access to attractive VAT bridging finance products.
Our brokers will make the process of obtaining a VAT bridging loan as seemless as possbile.
Hank Zarihs Associates streamlines your financing journey with tailored solutions, fast approvals, and expert guidance, connecting you to trusted lenders for project success
VAT loan facility is available from specialist lenders and doesn’t tend to be a mainstream product offered by a standard high street bank. The good news for businesses is that VAT funding tends to be flexible and offered according to their needs.
Terms and conditions of VAT funding solutions depend on the specific lender, but tend to have these types of features:
To apply for a VAT loan, simply contact the team at Hank Zarihs Associates and provide some basic information. We collect only the bare minimum of detail that our lending panel need to submit offers. This process takes just a few minutes and you will receive your loan offers back within the hour.
Once you have chosen your loan, we take care of the administration so that the lender can complete the transaction and release your funds in the shortest possible time.
Throughout the process we provide a superb level of customer service, offering advice and clarity at each stage of the process so that our clients are completely clear on the terms of their VAT loan and appropriate finance products which can help their businesses.
It’s easy to apply for VAT funding with Hank Zarihs Associates. Simply call us on 020 3889 4403, Monday to Friday, from 9 am to 9 pm and one of our team will be delighted to assist. Alternatively, please complete the short enquiry form on our website and one of our team will call you back at a time that best suits you.
You may have heard about bridging loans in the context of property investment or moving house, but what exactly are they? Basically, bridging finance is a type of short-term loan that allows a buyer to purchase a property before their existing home or investment property is sold. As the name suggests, it ‘bridges’ the funding gap in the lag between purchase and sale – offering rapid access to the necessary purchase funds for a brief period of time.
Borrowers can access from £5,000 to £250 million, depending on applicant status, the value of the property and other lender criteria. Higher lending amounts are typically reserved for borrowers who can put up several properties as security. Quotes are provided on a Loan to Value (LTV) of 65%-80% in most situations.
The bridging finance market has grown rapidly, with a number of small and focused lenders now on the market, catering for specialist property finance needs. The market has changed because large high-street lenders have become less willing (and sometimes less able) to lend ever since the financial crisis of 2008.
As to whether a bridging loan for property development, auction purchase or private home buying is a good idea, it depends on a variety of factors. Bridging loan requirements vary by lender, but each will have certain common features that need to be considered.
The most notable feature of this type of finance is that the interest rate is likely to be high. At the same time, there are typically high administration fees applied to the loan. Because of this, it is essential to proceed very carefully and with a full view of the facts. Borrowers have been burned by this type of loan in the past, in instances where transactions have fallen through, or where lenders have turned out to be unscrupulous and untrustworthy.
Benefits of instant bridging loans
1. Rapid access to money
2. Ability to borrow large sums – often up to £250 million depending on applicant status
3. Options for flexible borrowing.
Possible downsides of bridging loans:
1. Failure to understand the unique features of these loans can result in financial risk
2. Bridging finance is secured against your property; meaning it can be sold if you can’t meet the repayment terms
3. A costly option with fees and higher interest
Bridging finance interest rates will vary by lender. However, interest costs of 1.5% a month are not unusual, which can equate to an annual percentage rate of 18%.
Bridging loans may have fixed or variable interest rate features. Fixed interest rates are ideal for customers who want stability, as they offer the same amount of interest for the duration of the term. The rate is pre-agreed, but there may be a premium for this security.
The other choice is to have a variable rate bridging loan which can change with the base rate. However, you can save money if the base rate decreases. Borrowers who are less concerned about security sometimes prefer the variable rate option if they believe that the financial markets will travel in their favour. Knowledge and market insight is required here, along with a thorough understanding of personal risk tolerance. If interest rates appear to be rising, most customers will choose the fixed interest rate to lock it in and avoid further increases in the event of a base rate rise.
Bridging loan periods tend to be for several months and there are usually different options for paying the interest portion.
Monthly repayments
The customer repays the interest every month as a separate payment, rather than adding it to the outstanding balance
Rolled-up bridging finance deals
The compound interest is calculated monthly but added to the outstanding loan balance and paid together when repayment is due.
Retained interest
The monthly interest payment due is covered up to a predefined date so that the full sum is only repaid when monies are due.
As well as interest payments, there will be an arrangement fee for the set-up of the bridging loan, which is usually around 1-2%. A repayment fee for exit paperwork may also apply, along with valuation fees for the cost of the surveyor.
Remember, this type of finance is designed to be short-term. As soon as it extends beyond the agreed interim or bridging period, penalties can rapidly stack up. Typically, bridging finance is available for 1 – 18 months.
Yes, there are two broad types: closed bridging finance and open bridging finance.
With closed bridging finance you will tell the lender how you will repay the loan – with what funds and when. These loans usually complete within a few months and the clear exit plan is required as a lending condition.
Open bridge finance won’t usually need this type of exit plan, and it is typically the loan of choice when funds are needed urgently to complete a property transaction. No detailed plan is needed to explain how the debt will be settled, and the finance tends to be offered for up to a year. Of course, it’s important to note that interest will keep being applied throughout this period.
There are also first charge bridging loans and second charge bridging loans.
If you have a loan against a property which is already mortgaged, you’d take out a second charge loan. An example of this would be if you were planning to finance a property extension to improve the property. The categorisation tells the lenders who will have legal priority for repayment if the loan was unable to be paid off at the term-end.
First charge loans apply if the new loan is the first secured on the property.
Bridging loan requirements will depend on the lender. Often, lenders will require that:
Customers must also take out their property mortgage with them too, providing the bridge finance as an interim measure before the standard mortgage comes into play.
Property is put forward as security against the loan. Some lenders expect applicants to have more than one property in order to be eligible for their bridging finance products, but this will depend on the lender and the size of the loan.
Applicants show proof of income – although, interestingly, as loan interest isn’t repaid monthly, some lenders do not request this.
The applicant shows evidence of their property investment track record if they are planning to develop their purchased property.
The applicant can show a business plan if they are using the bridging loan for commercial purposes.
Development loans are another type of short-term property development loan. They are repaid in stages and calculated on the gross value of the development. Personal loans are another option, as are remortgages when timescales are more flexible and a long-term loan is desirable.
Use a bridge loan calculator
Ask for your lender to provide a tailored bridge finance example or illustration around your particular borrowing needs.
Think carefully about the type of bridging loan that you need – whether open bridge finance or closed bridge finance.
Know whether the loan is a first or second charge type.
Clarify whether the interest rate is fixed or variable.
Review products from several lenders.
Be clear on your security.
Read the small print!
Bridging loans are offered by banks, building societies, specialist lenders and brokers. They aren’t widely advertised and usually require a direct application by the customer to find out the product features and offers.
Once you have made an application, a decision will usually be made within 24 hours. The funds then will take around two weeks to be issued, including time for checks to be carried out, the valuation and the actual transfer.
Hank Zarihs are highly experienced and specialist financial intermediaries operating in the property development market. We work with a tried and tested panel of over 60 trusted lenders and can provide excellent bridging finance with attractive features. Contact us to find out more.
Hank Zarihs Associates streamlines your financing journey with tailored solutions, fast approvals, and expert guidance, connecting you to trusted lenders for project success
