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Keep your senior lenders happy and get your VAT funded with our three-step playbook
The commercial property market is kicking back to life, but it arrives with a growing risk of deal collapse due to the strains that VAT can create.
Being hit with a six or seven figure payment can put immense pressure on a deal, and it can sometimes be too large for prospective buyers to manage.
Our best practice guide can help you stop your acquisition collapsing – escape the tax trapdoor using our model of timeliness, structure and dialogue.
Being made aware of a VAT funding requirement in a timely fashion drastically increases the probability that we can deliver your loan.
Loan applications that fail are almost exclusively ‘hail Mary’ bids from developers or brokers looking to save a collapsing deal at the last minute.
While we will always do our best to fund any VAT bridging loan request, timely applications increase our capacity to successfully work in collaboration with all stakeholders to structure and deliver your loan.
We understand that VAT can be a peripheral factor in getting your deal done, but accounting for its impact is vital at the time of transaction.
Concerning the structure of the deal – purchasing your property via an SPV is, and will always be, the optimal method for delivering your VAT funding.
We have a 100% success rate when it comes to delivering properly structured VAT funding via a standalone SPV, and our structure has always been accepted by property focused senior lenders.
A newly formed SPV that is newly VAT registered and outside of a group structure creates the security that enables us to give loans without a second legal charge.
However, we understand that deals can be complicated by external factors, such as the lending policies of a senior lender.
We will always work with other stakeholders in the deal to try and deliver a mutually beneficial structure that creates certainty for all partners – this is where the third element of our model is most critical.
The final element of our model for avoiding deals collapsing is to recognise the importance of an open and collaborative dialogue.
The more we know about your deal, the better placed we will be to help you achieve your funding goals.
We are well-practised at dealing directly with other stakeholders, including lawyers or senior lenders, to discuss the options that are available to create a deal that is fair and suitable for everyone – thereby ensuring your VAT is funded and the deal gets done.
VAT funding is a fantastic way to deliver liquidity during your property purchase.
By following our three-step playbook, you can leverage this innovative funding model to avoid deals collapsing, boost your purchasing power and mitigate the opportunity costs that using equity to pay for VAT can create.
Speak to our team today to learn more about VAT funding or to explore the best options available to you.
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