VAT Loans for Professional Services
Professional services firms — consultancies, law firms, architects, and IT companies — have high output VAT relative to input VAT because their main cost is people (salaries are VAT-exempt), not materials. This means VAT bills are proportionally large relative to cash flow.
A VAT loan is a simple tool to manage this. The cost is modest, the process is fast, and it keeps your working capital available for what matters — salaries, rent, and business development.
Key Benefits
- High VAT liabilities relative to turnover — loans smooth this
- Keep cash available for payroll and business development
- Fast approval with minimal documentation
- Cheaper than using business credit facilities
Frequently Asked Questions
Why do service businesses have high VAT bills?
Because your main costs (staff salaries, rent) are VAT-exempt or zero-rated, you have minimal input VAT to offset against the output VAT on your fees. This creates a larger net VAT liability relative to turnover.
Can I set up an automatic quarterly facility?
Some providers offer evergreen VAT loan facilities that roll each quarter. You submit your VAT figure, the lender pays HMRC, and repayments begin automatically. This removes the quarterly admin burden.
What about partnership structures?
Partnerships and LLPs are eligible for VAT loans. The application is made in the partnership name, with partners providing personal guarantees where required.
Is a personal guarantee required?
For limited companies, most VAT loan providers require a director's personal guarantee. For sole traders and partnerships, the principal is already personally liable.
Related Funding Options
VAT Loans UK
Spread the cost of your quarterly VAT bill. VAT loans for UK businesses from £5k to £500k with terms of 3-9 months.
Unsecured Business Loans for Professional Services
Growth funding for UK consultancies, IT firms, accountancy practices, and law firms. No property security required.
Tax Loans for Professional Services Firms
Spread Corporation Tax and partner tax bills for UK consultancies, law firms, and professional practices.
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Learn About Our Broker NetworkCoreFi is a trading name of JG Core Ltd (Company #16218779, England & Wales). CoreFi acts as a commercial finance broker and does not provide regulated financial advice. All products described are unregulated business-to-business finance. Information on this page is for general guidance only and does not constitute a formal offer of finance. Terms, rates, and availability are subject to lender criteria and may change without notice.