Commercial property purchase
Funding for the VAT due on a property where it is charged on the price, repaid once the reclaim comes through.
VAT funding
Let the reclaim pay the VAT, not your cash
For businesses facing a large VAT payment on a property or asset purchase, or a quarterly bill that lands at the wrong moment. A VAT loan covers the gap until the money comes back or the cash comes in.
VAT on a large purchase can land months before you reclaim it. A VAT loan covers that gap so the reclaim, not your working capital, pays for it. The same approach can spread a quarterly VAT bill over a short term rather than taking it in one hit.
The usual triggers are a commercial property purchase where VAT is charged on the price, a large asset purchase, or a quarter where the VAT bill arrives just as a big contract is being mobilised. In each case the business is sound, the timing is the problem.
3S arranges VAT funding through our sister business, Novora Asset Finance™, alongside any asset or property finance for the purchase itself, so the whole deal is looked at together.
Why 3S
- One contract, one point of contact
- A plan within 48 hours
- Facility agreed before you commit
- Broad lender panel via Novora Asset Finance™
VAT funding
Where VAT funding applies
Large asset purchases
Covers the VAT element of plant, vehicles or equipment so it doesn't come out of working capital.
Quarterly VAT bills
Spreads a quarterly payment over a short term so HMRC is paid on time without draining cash.
VAT bridging
Short-term funding between paying VAT and receiving the reclaim.
Alongside the main facility
Arranged with the asset or property finance, so the whole purchase is funded in one conversation.
A defined repayment source
The loan is sized around the reclaim or your trading, so the exit is clear from the start.
Terms before you commit
Novora sets out the term, the total cost and any fees in writing before you sign.
How a VAT loan works in practice
On a purchase, the lender pays or funds the VAT element. You then reclaim the VAT on your return in the normal way, and the loan is repaid once HMRC has made the repayment. The term is short because the exit is known.
On a quarterly bill, the lender pays HMRC and you repay over a few months from trading. This can be useful in a lumpy quarter, but it costs money, so it makes sense where the alternative is holding back on work that pays.
Two points to check early. Some property sales are treated as a transfer of a going concern, in which case VAT may not be charged at all. And the timing of your reclaim depends on your VAT return period and HMRC's checks. Your accountant should confirm both before the funding is sized.
How it works
Three steps, one point of contact
Step 1
Tell us the purchase or the bill
What is being bought, the VAT amount and when it falls due. If there is a main asset or property facility, tell us about that too.
Step 2
Novora sizes and places it
Novora approaches lenders with an appetite for VAT funding and, where relevant, arranges it alongside the main facility. Straightforward applications usually get an indicative decision quickly.
Step 3
Agree, pay, reclaim, repay
You see the terms, total cost and fees in writing before you commit. The VAT is paid, you reclaim it through your return, and the loan is cleared.
Next steps
How the funding fits alongside the work
Where the VAT arises on a 3S project, such as a refurbishment or a plant replacement programme, it sits alongside the proposal like any other facility. You apply while the proposal is under review, and the funding is agreed before contracts are signed. Finance is subject to status and credit approval. 3S Consult is not a lender and does not give financial advice. Applications are handled by Novora Asset Finance™, who set out the terms, the total cost and any fees before you commit.
Evidence
What you hold before you commit
You get written terms showing the amount, the term, the total cost and any fees, and a clear view of how the loan is repaid, from the reclaim or from trading. Nothing is signed until the facility is agreed.
Questions
VAT funding: common questions
How does VAT funding work?
A lender pays or funds the VAT due on a purchase or quarterly bill, and you repay it once your reclaim arrives or over a short term from trading. The cost and the repayment dates are set out before you commit.
Can I get a VAT loan for a commercial property purchase?
Yes, this is one of the most common uses. It is usually arranged alongside the property or asset finance, so tell us about the whole purchase at the start.
Is a VAT loan the same as HMRC Time to Pay?
No. Time to Pay is an arrangement made directly with HMRC, usually where a business is struggling to pay. A VAT loan is commercial funding from a lender, and you pay HMRC on time.
Do I need to be VAT registered?
For reclaim-based funding, yes, because the loan is repaid from the VAT you recover. Your accountant can confirm whether the VAT on your purchase is reclaimable.
What if the reclaim takes longer than expected?
HMRC can take longer to repay if it checks a return. Ask Novora how the lender handles a delay before you commit, so there are no surprises.
Related services
Often needed alongside this
Asset finance
For businesses that need plant, vehicles, IT or equipment without handing over the full price on day one. The cost is spread into fixed monthly payments, arranged through Novora Asset Finance™.
Read more →Business loansFor SMEs that need cash for growth, payroll, stock or a gap between committed spend and income. Loans are arranged through Novora Asset Finance™ from a broad UK lender panel.
Read more →Strategic facilities managementFor owners and managers of larger or multi-site estates. A clear view of your assets, budgets and contracts, so spending is planned rather than forced.
Read more →