"The majority of businesses set money aside for VAT bills they know are coming their way but inevitably there is the temptation to dip into that pot especially when faced with the type of pressures Covid has introduced."
Just Cashflow has introduced a VAT loan facility designed to help SMEs keep their finances in order as they look to deal with the challenges from Covid and make recovery plans.
The new VAT Loan recognises that businesses will want to both pay their VAT bills as quickly as possible and free up valuable cash flow, therefore the loan is for a maximum three-month term.
The facility also recognises the need for payments to HMRC to be made on time so there is a fast and light touch application process.
Martine Catton, chief operating officer, commented: “All businesses appreciate it’s important to pay their quarterly VAT bills on time and HMRC shows little tolerance for late payments.
“The majority of businesses set money aside for VAT bills they know are coming their way but inevitably there is the temptation to dip into that pot especially when faced with the type of pressures Covid has introduced.
“The Government has recognised this with its Covid VAT Payment Deferral Scheme but it only covers payments due between 20 March 2020 - 30 June 2020. We are introducing our facility now knowing it will be valued when the next and subsequent quarters’ VAT bills are due on top of deferral repayments having to be made.
“Payments will inevitably come at a time when there will be many demands on SMEs’ finances and many are likely to have raided their VAT saving’s pot.
“It’s important for lenders to anticipate the Covid challenges SMEs are going to be facing and provide the flexible finance facilities they need. This will leave businesses better placed to make a major contribution to the UK’s economic recovery."