Business Loans Guide
Corporation Tax Loan
A guide to securing a corporation tax loan
Every business is responsible for paying their tax bill, however this can arrive at inconvenient times. If your business in unable to pay its bill, a corporation tax loan is an ideal way to spread a tax demand across affordable monthly repayments. To help you secure a corporation tax loan we have produced this useful guide which will explain everything you need to know about tax loans.
What is corporation tax?
A corporation tax bill is based on the level of income earned through trading, the income from asset sales and other taxable events throughout the tax year. If your business is a limited company, a member’s only club, a trade association, housing association, or a group of individuals operating as a business but outside of a partnership, you will be liable to pay corporation tax.
The current rate for UK corporation tax is 20%, and this also applies to any overseas companies which have an office or branch within the UK. The bill is calculated by HMRC and is usually due roughly 9 months after the businesses accounting year finishes.
If the tax liabilities are not paid on time, there are penalties and if the bill is very high the business could be forced to liquidate completely. Unfortunately, many businesses are not in a position to pay their bill and HMRC will not send reminders about the bill until they are overdue.
This can be difficult if the current available capital does not meet the amount demanded in the corporation tax bill. It is not uncommon for cashflow to increase or decrease based on business activities, so ideally over the course of a year funds should be set aside to meet the tax bill. However, over the course of the year unexpected costs may occur which will put pressure on any capital which has been set aside.
What are the benefits of a corporation tax loan?
Corporation tax loans are increasing in popularity as more businesses aim to improve their cash flow. A stable and fluid cash flow allows businesses to take advantage of new opportunities and can also be used to fund unexpected costs or drops in income. Not only will you have an improved cash flow, you will also avoid the risk of high charges for late or non-payments. By improving the financial stability of your business, you will be able to improve the flow of capital, so that when the next corporation tax bill is due you will be in a better position to pay.
Whatever type of business you operate, it will be possible to obtain a corporation tax loan. There are many flexible loans available which will enable you to spread your tax bill over anything from 6 to 12 months, with fixed monthly or quarterly payments. By working with a variety of lenders who specialise in commercial finance we can provide loans designed to meet your individual repayment abilities.
Our lenders specialise in offering a range of loans from £1,000 up to £20,000,000, so you can be sure that we will have a corporation tax loan which cover the cost of your bill. By applying through our website, you will be able to access the most competitive loans on the market, with low interest rates and easy to afford repayments.
How to apply for a corporation tax loan
By working with a variety of lenders who specialise in finance such as corporation tax loans, there are many options to choose from. To find a corporation tax loan which is perfectly aligned to the needs of your business, we have developed our tax loan comparison tool. The tool is free to use with no impact on your credit file and at the end of the process there is no obligation to complete an application.
The tool is divided into two stages, with the first asking questions such as; how much you need to borrow, whether the business trades at a profit and how long you have been trading. To narrow down the lending options the second stage will ask for details such as what type of business you run.
The results will be displayed in an easy to understand order, so that you can quickly compare the available corporation tax loans. At the top of the list will be the lender which most closely matches your requirements, based on the amount available, the interest rate and their specific terms.
What is the difference between a secured and unsecured corporation tax loan?
All loans regardless of the amount borrowed and repayment terms will be either secured or unsecured. A secured corporation tax loan will require you to provide the lender with assets to be used as collateral on the loan amount, such as property, stock, machinery and vehicles. A secured loan is ideal for businesses which are asset rich but cash poor, such as those who have run into financial difficulty recently and now have a poor credit rating.
If your business has a poor credit history, the lender is likely to view the loan as high risk. Although, it is possible to lower the risk by providing assets as security, if the loan defaults, the lender will sell these assets to recoup the money lent. Although, this does mean that in most situations you will probably only be able to borrow an amount which matches the value of your assets.
In comparison, an unsecured corporation tax loan will not require you to provide physical business assets as security. These types of loans are usually only accessible to those with an excellent credit history, or businesses which only need to borrow a small amount. Although the loans do not require collateral, you may be asked to provide a personal guarantee. This means that your own assets and finances are used as collateral, with any missed payments taken from your own personal funds.
Quick approvals for corporation tax loans
By working with a vast number of lenders we can provide easy to arrange corporation tax loans, with decisions in as little as 24 hours. Once you have found an ideal loan through our comparison tool, it is very easy to complete your application. The details you have provided will be sent across to the lender, who will then ask for evidence such as your tax bill, bank statements, profit and loss accounts and a cash flow forecast.
To make the whole approval process as quick as possible some of our lenders have an option to E-sign your agreement, with the payment then made directly to your bank account or HMRC. In addition, to guarantee your application is processed quickly it can help if your financial documents are ready to provide to the lender.
To find out more about how a corporation tax loan could improve your cash flow and avoid late payment charges, please contact our experienced team today. If a corporation tax loan is not the right option for your business, we can also provide a variety of loans such as overdrafts, credit cards, short-term loans, lines of credit and merchant cash advances, which are available as either short or long term solutions depending on your specific requirements.