Professions finance: Taking the tension out of tax time
In this article, Phil Simmons, Senior Business Development Manager, Professions Finance at Shawbrook, explains how a Professions Loan could help clients to fund their annual tax liabilities and preserve vital cash flow.
At a glance
The deadline for the second payment on accounts for tax bills is fast approaching! Many medical, legal and accountancy businesses will be concerned about the impact of this large expenditure on their free cash flow whilst also juggling many other operational costs and striving to grow their business.
Phil Simmons, Senior Business Development Manager, Professions Finance at Shawbrook, explains how a Professions Loan could help ease the financial pressure for your clients throughout these stressful obligation periods, by utilising finance to spread the cost over a longer period of time.
Cash flow is king
As we close out the first half of the year, many SMEs may be wondering how it is already time to complete their second annual tax obligation, and facing concerns about how it will impact their cash flow. With a long list of operational expenditures, such as rent and wages, as well as funding key projects aimed at enhancing services for customers whilst ensuring invoices are paid on time, preserving cash flow is crucial.
Brokers can support their clients to achieve financial flexibility by putting forward suitable funding solutions that allow them to spread the cost of these tax bills - and other obligations such as Professional Indemnity Insurance - over a set term. This can help alleviate immediate demands on cash flow and preserve vital working capital, all while ensuring they fulfil their HMRC obligations on time.
Spotlight
A reputable law firm based in the South of England was looking to preserve cash flow by spreading the cost of its annual tax liability into manageable, monthly repayments. Shawbrook worked with its broker partner to deliver a flexible solution to achieve this goal.
- £50k Tax Loan agreed
- Electronic documentation provided
- Quick payment of the full tax bill paid quickly directly to the client
Multiple liabilities, one facility
While tax payments may be the immediate priority for businesses, the next financial obligations are just around the corner. With tax payments due twice a year in January and July, quarterly VAT liabilities and annual Professional Indemnity Insurance renewals, it can feel like a never-ending cycle of single large expenditures and spikes in cash flow utilisation.
Companies can combine some or all of these liabilities under one flexible structure, with payments spread across several months. This can provide a simple solution that can smooth out the impact of these liabilities over a longer time period, giving finance teams headroom to manage receivables.
To cater for larger facility needs, Shawbrook recently increased its maximum loan size from £1.25m to £2m, which has supported a legal firm to spread their VAT bill over several months.
Spotlight
A large, multi-office legal firm servicing clients nationwide was looking to smooth their seasonal cashflow spikes by spreading the cost of their quarterly VAT liability into fixed monthly repayments.
- £1.5million VAT Loan facility agreed
- Simple, electronic documentation provided
- Payment to firm’s nominated account within 28 hours of acceptance
Why work with Shawbrook?
If your legal, medical or accountancy professions clients are looking to smooth out their working capital requirements, Shawbrook can provide flexible funding solutions.
Benefits of a Shawbrook Professions Loan include:
- Choice of payment of funds directly to customer or HMRC on a date of their choice
- Speedy decisions and turnaround
- Simple, electronic documentation
- Competitive rates
- Access to a dedicated finance expert at the end of the phone
Here’s what one of our valued broker partners has to say…
“I really couldn’t be more pleased with the service levels and speed of processing delivered by Shawbrook’s Professions team […]. We had to turn around a high six-figure capital lend in less than two days, from proposal to payout. How many other current funders in the paper professions sector could achieve an approval, presentation of digital documents, and same-day TT payout to the PII broker in 48 hours? The answer is NONE! It's incredibly pleasing as a broker to see Shawbrook Professions return to their position as a leading funder in this market sector. Very happy broker and even more satisfied client.”
– Alun Lifecycle Corporate and Business Finance
If you are a broker who is interested in working with us to support your medical, legal and accountancy clients, click the link below.
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