Export VAT Finance

This is a specialist type of finance and only a few finance companies offer this type of facility in UK. It is appropriate where goods are bought in the UK for cash and then exported for cash. Typical goods are likely to be:

• Computer peripherals
• Mobile phones

This type of facility is useful if you buy goods in UK, on which you have to pay VAT and sell them overseas without VAT. The higher margins overseas may generate extra profits but creates short-term cash flow issues as the VAT on purchases is tied-up with the Customs & Excise until a recovery is made through the VAT cycle. The export VAT finance facility bridges this funding gap, allowing you to take advantage of more profitable opportunities overseas. Certainly, these types of financing arrangements are expensive, compared to normal bank facilities, but the point to remember is that these are additional sources of profit which can be significant to wholesale trading companies.