What is a tax bridging loan?

Tax bridging loans, also known as tax loans or tax funding, are a type of short-term financing designed to help businesses and individuals meet their tax obligations. These loans are typically used to bridge the gap between the time when taxes are due and the time when the borrower has the funds to pay them.

Tax bridging loans are becoming increasingly popular due to the significant financial pressure that tax liabilities can place on businesses and individuals. The penalties and interest charged for late tax payments can quickly add up, making it difficult for those with cash flow constraints to pay their tax bills on time. Tax bridging loans provide a viable solution to this problem by providing the funds needed to cover tax liabilities, while allowing borrowers to manage their cash flow more effectively.

There are two primary types of tax bridging loans: business tax loans and personal tax loans. Business tax loans are typically taken out by companies that need to cover their tax liabilities, including income tax, payroll tax, and goods and services tax. These loans can be secured or unsecured, depending on the lender's requirements and the borrower's creditworthiness. Personal tax loans are typically taken out by individuals who need to pay their personal tax obligations, including income tax and capital gains tax.

What are the benefits of tax bridging loans?

One of the key benefits of tax bridging loans is that they are designed to be quick and easy to obtain. Unlike traditional loans, tax bridging loans do not require extensive documentation or credit checks. This means that borrowers can access the funds they need quickly and with minimal fuss. The loan application process is typically completed online, which makes it even more convenient for borrowers.

Another benefit of tax bridging loans is that they can help businesses and individuals avoid costly penalties and interest charges. Late tax payments can result in significant financial penalties, which can add up quickly. By using a tax bridging loan to pay their tax obligations on time, borrowers can avoid these penalties and save themselves money in the long run.

What is there to consider before taking out a tax bridging loan?

One important consideration when taking out a tax bridging loan is the interest rate. Because these loans are designed to be short-term, the interest rates can be higher than those associated with traditional loans. Borrowers should be aware of the interest rate and any associated fees before taking out a tax bridging loan. It is also important to ensure that the loan amount is sufficient to cover the tax liability and any associated fees.

In conclusion, tax bridging loans are an excellent option for businesses and individuals who need to cover their tax obligations but do not have the funds available to do so. These loans provide a quick and easy way to access the funds needed to pay taxes on time, while also helping borrowers avoid costly penalties and interest charges. However, borrowers should be aware of the interest rate and any associated fees before taking out a tax bridging loan and ensure that the loan amount is sufficient to cover the tax liability and any associated fees.

At Mercantile Trust, we always aim to help individuals who have time-critical debts which need to be settled. Whether that be stamp duty, inheritance tax or income tax or any other type of tax related issue. We are here to help.

We understand that paying tax can be stressful, so it is our mission to provide you fast funding to pay off your urgent payments.

We could arrange a tax bridging loan to help you resolve these payments. Call our freephone number above to speak to one of our experts today.

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Our flexible approach

Speed

We are proud to be a lender who can deliver loans at a fast approach, to consumers. We make this possible by carrying out our own legal checks, in house for loans under 100k, within hours. We can offer automated valuations, which are available to produce financial solutions in an instant.

Mercantile Trust regularly help their customers carry out renovations with heavy refurbishment loans, by providing finance fast.

No minimum income

At Mercantile Trust, we put our customers at the forefront of what we do.

We offer top slicing, where we can use your personal income when carrying out affordability calculations. If your rental income does not cover your mortgage repayments, we will top up the remaining amount that you cannot cover so you are able to get the loan you require.

No Exit Fees

We want you to be in control of your finance.
With no early repayment or exit fees, Mercantile Trust will strive to find a loan to meet your financial requirements.

Our bridging loan criteria

We aim to help absolutely everyone, however there are certain criteria that must be met in order to make a successful application:

  • Unregulated bridging applications only
  • Rates from 0.99%
  • Up to 75% loan to value
  • Most property constructions accepted
  • No personal income requirement
  • No exit fees
  • Minimum property value £75k
  • Minimum advance £25k max £500k
  • Confirmation of exit required
  • Minimum of one buy to let or residential property required
  • Serviced and rolled interest available
  • No ERC (Early Repayment Charge)
  • First and second charge available