Cash Flow is the Lifeblood of SME’s…
Industry News11th June 20190 CommentsGeorge Settle
For most small and medium-sized businesses, taking a large chunk of cash out of their bank every 3 months and sending it directly to HMRC isn’t something that’s eagerly anticipated.
85% of bills are paid weekly or monthly… VAT, on the other hand, is still requested on a quarterly basis. This can put unnecessary strain on vital cash flow and be a trigger for uncertainty, in the run-up to key trading periods.
Introducing VAT Funding…
Fortunately for all business owners, finance directors & accounts managers alike. A better way has come to fruition – You can now turn your quarterly payment into 3 equal monthly payments, paid AFTER the liability is due, opening the door to a whole host of growth opportunities.
The VAT funding process is simple:
- Receive a cash injection for the same amount as your upcoming quarterly VAT bill, paid either into your bank or direct to HMRC.
- Retain more capital for longer, whether it’s to keep money in the bank longer to deal with whatever could be lurking around the corner or investing in something that’s going to generate a greater short-term return.
- Then at the end of each month, re-pay a 1/3 of the bill + any interest charges, until the end of month 3 when the bill has been paid in full.
Once the 3 months is up and your next bill is due, the choice is once again yours:
Pay it in full or re-invest again!
For some businesses, it works so well that they use it every quarter! Others merely dip in and out as and when their needs require. Better still it can be set up with absolute ease, with most lenders requiring only your:
VAT return, Latest accounts & 3 months banks statements
It’s widely understood that capital is a business’s most valuable asset and by keeping hold of more of it for longer, your business will automatically have more purchasing power. This allows you to accelerate growth & maximize profit margins, whilst having as little impact on cash flow as possible.
Equally important to having cash in the bank, is keeping up to date with the Taxman…
Don’t Delay, Just Pay
One of the most common reasons a lender will refuse to lend is when a business is in a payment plan with HMRC – which means the situation can quickly spiral out of control. Delaying payments to the Taxman can be a risky game to play, and the result could be more than just a slap on the wrist. HMRC are now issuing a 15% surcharge, for late payments and for repeat offenders, it might be a threat to the existence of the business itself.
Rather than put your business at risk, have a think about this simple and efficient solution to a problem that is inevitable at some point in your business cycle, with key features such as:
- Quick and simple to arrange
- Can be paid directly to HMRC or into your bank
- 3 Fixed monthly repayments
- Save on interest compare with longer term facilities
- Takes the pressure off cash reserves
- Re-invest to accelerate growth
- Combats seasonality
- Smooths cash flow peaks and troughs
Get in touch with Sedulo funding solutions today for a no obligation review, to find out if you’re eligible to join many other businesses who are reaping the rewards of VAT funding,