Posted: Monday, 13 January 2025 @ 11:33
For many businesses the early months of the year are absorbed with preparing for tax bills including VAT and Corporation Tax payments.
While a big bill heralds a level of financial success that's to be celebrated, the sizeable outlay can present an inconvenient cash flow challenge that isn't necessarily the most productive use of capital.
What many business owners are unaware of however, is the availability of working capital loans that can be used to cover payments in full, without disrupting daily operations. If you have a client that you think might benefit - read on.
How working capital loans can help SME businesses
Sensible capital management is always an imperative part of running a business, and at no time is there a greater reminder of that fact than when personal tax bills, followed by a steady flow of VAT and Corporation Tax are on the horizon.
Corporation Tax can, in some instances, be paid in instalments, business owners usually want to get it out of the way to avoid the risk of missing a payment.
While there hasn't been a rise in Corporation Tax rates for the financial year beginning 1st April 2026, the increase in National Insurance contributions for employers from 13.8% on salaries over £9,100 to 15% on salaries above £5,000 from April, adds further strain on employers.
This creates an additional need for financial planning when it comes to cash flow, and working capital loans can be a helpful option.
Do your clients know Corporation Tax and VAT funding is available?
The value of short-term business loans for providing cash flow solutions for SMEs, including Corporation Tax and VAT funding for businesses, is often underestimated. In fact, many businesses are not even aware that the option is open to them. Research last year showed that lots of business owners are unaware of the options available to them when it comes to business loans - information that would no doubt provide some welcome wiggle room when it comes to financial planning.
Not intended as a bandage solution for financial difficulty, but as a proactive approach to sensible capital management, dedicated loans can help businesses to make appropriate provision for large lump sum payments, repaid over a more manageable period, between three and 12 months. For example, Rivers offers short-term business loans from £5,000 to £100,000. Key features include:
- No early repayment penalties
- Interest is fixed over the course of the term
- Repayments made at 14-day intervals
- Renewals available after 50% of the original loan has been repaid
If you would like to find out more about our business loans, you can contact our Business Development Manager – Corporate Loans, Ian Mills on ian@riversleasing.com, or follow the link for more information and to apply online.
Find out more about Rivers Business Loans