VAT Loans - Get Finance To Pay Your VAT Bill In Full, On Time
Key Features
- Borrow from £5,000 to £500,000
- Repay over 6 to 60 months
- Unsecured, with no property or assets needed
- Used by wholesalers, contractors, retailers and agencies
- Representative APR 18.9%
- Imperfect credit considered
- Decisions in as little as 24 hours
We have partnered with Acceptance, who can provide an indicative quote and successful funding within 24 hours.
If you have a looming VAT bill, Octagon Capital can help you access £5,000 to £500,000 to settle with HMRC, with the flexibility to repay over 6 to 60 months.
Need a Loan To Pay Your VAT Bill? Start Your Application
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How Do VAT Loans Work?
Every quarter, many businesses face a VAT bill that is due whether or not their customers have paid them yet. When a strong quarter brings in more sales, the VAT owed rises too. That can leave a sizeable sum to find at the same time as wages, rent and supplier bills.
A VAT loan bridges that gap. A lender advances the money, you pay HMRC in full before the deadline, and you then repay the lender in equal monthly instalments over a term that suits your trading. Octagon Capital has partnered with Acceptance, a specialist UK business lender, to give our clients access to dedicated VAT loans from £50,000 to £500,000. These don’t require you to put up property or equipment as security.
Because the money goes straight towards your VAT, your HMRC account stays up to date. You avoid late payment interest, penalties and the stress of chasing an arrangement with the tax office.
VAT Loan Example
Mark runs a building supplies wholesaler in Manchester. After a busy summer, his quarterly VAT return comes to £120,000, which is far higher than usual. Several large trade customers are on 60-day terms, so most of that money hasn’t arrived yet.
Rather than delay paying HMRC or hold back on stock for the autumn, Mark applies for a VAT loan through Octagon Capital. He is approved for £120,000 over 24 months, and the funds reach his account ahead of his VAT deadline.
He pays HMRC in full and on time. Based on a representative APR of 18.9%, his repayments come to around £5,960 a month, or roughly £143,000 in total. That cost is fixed and known from the start, and his working capital is free to keep the business moving.
(This example is for illustration only. Your rate and repayments will depend on your business and the lender’s assessment.)
Use Our VAT Loan Calculator
Enter the size of your VAT bill and how long you’d like to repay it over. One of our advisers will get back to you with your options and the next steps.
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What Are The Benefits Of Using Octagon Capital For A VAT Loan?
Stay On The Right Side Of HMRC – Paying your VAT in full by the due date keeps your account clean. It avoids interest and penalties, and it stops you from building up late payment problems that could follow your business for months.
Protect Your Cash Flow – A VAT bill can wipe out the cash you rely on for payroll, stock and overheads. A loan lets you keep that money in the business and pay the tax back gradually.
Know Exactly What You’ll Pay – Repayments are fixed for the whole term, so there are no surprises. It’s easier to budget for one steady monthly cost than for unpredictable HMRC charges.
Quick Turnaround – VAT deadlines don’t move, so speed matters. Applications can be reviewed within a day, giving you a real chance of clearing your bill before it falls due.
Flexible Repayment – Terms run from six months to five years, and there are no fees for settling early. If your cash flow improves, you can clear the loan sooner and save on interest.
What Is The Criteria For A VAT Loan?
- VAT-registered and trading in the UK
- Limited company, sole trader, partnership or LLP
- At least 12 months of trading history
- Minimum annual turnover of £50,000
- 3 to 6 months of business bank statements
- Not in administration, liquidation or with unpaid CCJs
Am I Eligible For a VAT Loan With Octagon Capital?
Most established, VAT-registered businesses can apply. If your VAT bill is larger than the cash you can comfortably spare, or it has landed before your customers have paid you, a VAT loan could be a good fit.
Through our partnership with Acceptance, applications are assessed by real people who look at how your business is trading now and whether the repayments are affordable. A less-than-perfect credit history, or an existing Time to Pay arrangement with HMRC, won’t necessarily stop you being approved.
What Types Of Businesses Use VAT Loans?
VAT loans are popular with any business that collects a lot of VAT on its sales but has to wait to be paid by its customers. Common users include:
- Wholesalers and distributors
- Construction firms and contractors
- Retailers and e-commerce brands
- Recruitment agencies
- Marketing and creative agencies
- Hospitality businesses
- Manufacturers
These businesses often have high turnover and long payment terms with their clients. Their VAT bill is worked out on what they’ve invoiced, not necessarily on what they’ve received.
When a busy quarter produces a large VAT liability, the cash simply may not be in the bank yet. A VAT loan clears HMRC without forcing the business to cut back on staff, stock or growth plans.
VAT Loan FAQs
A VAT loan is a business loan used to pay your VAT bill to HMRC in full. You then repay the lender in fixed monthly instalments rather than paying the whole amount at once.
No. Time to Pay is a payment plan agreed directly with HMRC, which may or may not be accepted. A VAT loan is separate finance that pays HMRC straight away, so you owe the lender instead of the tax office.
Usually not. The VAT loans available through our partnership with Acceptance are unsecured, so you don’t need to offer property or business assets.
You can typically borrow between £50,000 and £500,000, depending on your turnover and affordability.
You can borrow over 3 to 24 months, although some lenders may have different terms and there may be a different minimum (e.g 6 months) or a different maximum term (e.g 12 months).
Rates are set individually and confirmed before you commit. The representative APR is 18.9%, and the interest is built into your fixed monthly repayment.
The initial eligibility check is a soft search, which doesn’t affect your credit score. A full search may be carried out if you decide to go ahead with an offer.
Yes, similar funding can often be used for PAYE and National Insurance, corporation tax or directors’ self assessment bills.