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3 Things You Need to Know About VAT Funding

Accountant's spreadsheet and calculatorVAT stands for Value-Added Tax. This is a type of tax that is often added to a product if there is value added towards the final sale or during the final stages of its production. For instance, if you buy a laptop that is produced somewhere in Europe, the laptop manufacturer pays VAT on every piece of material used to produce the said product. As the end consumer, you pay the applicable VAT. Now, there are cases when the manufacturer needs to get a loan to pay for the VAT they are being charged with.

Corporate and Medical Finance Ltd lists some of the things you need to know about an application for VAT loans.

How does a VAT loan work?

First, you need to find a lending company that offers VAT funding. You inform them about the amount of VAT debt you need to pay, and they will create a proposal to finance the debt for a particular period, normally between three and 12 months.

What are the advantages of getting a VAT loan?

For several SMEs, VAT payments can largely affect their cash flow, especially if there are a lot of challenges and setbacks. This means that the company often need to reduce their working capital just to cover the VAT payments. A VAT loan or funding can help SMEs lighten their load by stretching the payments within a specific term, freeing up any bottlenecks without the worry of being delayed in VAT payments.

Do I need to have good credit to have my VAT loan approved?

Like any loan, lending companies conduct credit and risk profiles checks to ensure credibility and establish good status before the VAT funding is approved. This is why borrowers are advised to work on their credit scores first so they can easily apply for VAT funding and help their cash flow to improve.

Get a VAT Loan Today.

If you’re having trouble with your VAT payments, consider applying for VAT funding. It’s a good and flexible financial solution to your VAT payment problems.

 

 

September 13, 2017 at 5:26 pmMind of Money