tax loan

Why Take a Tax Loan?

06 Nov 2020

Chris O'Shea | Applying for Finance

Tax is never a popular subject, especially when we have entered a new national lockdown and the holiday season is just around the corner!

If you chose to defer your July 2020 tax payment, then the balance is now due in January 2021. To avoid being charged interest or penalties, you will need to cover the payment in full before 31 January 2021.

Having another large payment to make at this moment in time may be an unwanted liability and could put extra pressure on your business and have a negative impact on your cash flow.

Many professionals are now choosing to cover personal tax or corporation tax via a tax loan. This is because of the large amounts due in one payment.

You can find out more about tax loans here.

What is a Tax Loan?

A tax loan is a loan taken out by a company or sole trader with the intention of covering a looming tax bill.

If your tax bill is due in the middle of a cash flow crisis, you may find yourself unable to pay that bill in full and on time. If this happens, your business could be in serious danger of incurring penalties such as interest charges.

Therefore, some businesses find they benefit from taking out a loan to cover the immediate expense.

Why not spread the cost of your tax bill into easily affordable monthly payments with an unsecured loan over a 6 or 12 month term and this could even free up capital to invest in other areas of your business.

You can find out more about tax loans here.

How do I Apply for a Tax Loan?

So, how do you apply for a tax loan? We can find you the best rates by sourcing a number of offers from several lenders, but you will need to provide certain pieces of information and data:

  • Tax returns
  • Breakdown of your personal income & expenditure
  • 3 months personal and business Bank statements
  • Last 3 years financial accounts
  • Management information (if available)

Lenders will need you to demonstrate that you have a history of keeping up with their repayments, as this is an unsecured facility.

Below is an example of indication rates and repayments: –

Loan amount: £10,000

Total interest repayable: £900

Total amount repayable: £10,900

Regular repayments: £908

Repayment frequency: Monthly

Total repayments: 12 repayments

Indication Rate: 9%

Please contact us directly if you wish to explore your options.

Samera Finance are experienced healthcare brokers with a banking background we have access to many lenders. It’s always best to explore the market and see what is available rather than just approaching a single lender.

Apply for a tax loan with us here.

See how much you can raise

Use our Loan Calculator to see how much you can raise for your tax loan with us.

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