VAT Bridging Loans

Benefits of VAT Bridging Loans

VAT bridging loans help you manage VAT costs without tying up working capital. As a result, you can proceed with purchases that you might otherwise delay or miss.

Specialist lenders offer these loans for several purposes, including:

• VAT on commercial property purchases
• Cash flow support during a transaction
• Bridging finance while you wait for invoices to be paid
• Other short term funding linked to a purchase or refinance

How Much Do VAT Bridging Loans Cost?

VAT bridging loans often start from around £50,000. They can also reach £20 million or more, depending on the deal and the lender.

Costs can include interest, arrangement fees, valuation fees, and legal costs. Because VAT bridging is short term finance, it usually costs more than standard loans.

For official guidance on VAT and property transactions, see HMRC guidance on VAT land and property.

VAT Bridging Loans vs VAT Loans

A VAT bridging loan covers VAT on a commercial property purchase until you reclaim the VAT or arrange longer term finance.

A VAT loan is a longer term facility. Businesses often use it to spread the cost of VAT on assets such as machinery or equipment.

The right option depends on the funding purpose, how quickly HMRC will refund the VAT, and how you structure the wider transaction.