'A short-term business loan can be an ideal way to pay your tax bill'
A loan to meet your tax bill allows you to take control of cash flow and spread the cost of the bill into more manageable monthly payments
The application process is quick and simple. You can apply for a Bank of Ireland tax loan up to €120,000 over the phone or online. Photograph: iStock
It’s an all too familiar story for many businesspeople: the tax bill is larger than anticipated while cash flow is tied up in running and growing the business.
This is a situation encountered by even the most prudent of business owners. Indeed, many times the problem can be a consequence of success according to Michael Lauhoff, director of Business Banking at Bank of Ireland. “Fast-growing businesses have to invest in stocks and the growth of their business, while cash flow receipts don’t materialise as larger outgoings such as tax and pension contributions need to be funded. The money will eventually come in but just not when it is most needed.”
The options can appear stark: hold back on investing in the business or on pension contributions or both. But there is quite a simple solution, Lauhoff points out, a tax loan from Bank of Ireland.
“A short-term* business loan can be an ideal solution to pay your tax bill,” he adds. “It offers business owners more control over upcoming costs and frees up resources for investment in longer-term plans to grow the business, especially in a relatively low-interest environment. It allows you to take control of your cash flow and spread the cost of the tax bill into more manageable monthly payments.”
Spreading the tax bill over 11 monthly repayments is increasingly common among business people. And one of its key attractions is that it makes valuable cash reserves available for other uses.
“When you pay off your tax or preliminary tax bill in a lump sum, you don’t have to worry about penalties and interest from Revenue**. You can also pay off a Bank of Ireland tax loan as quickly as you want without paying any additional fees”.
The short-term nature of the loan is also important. This ensures that the business is not building up long-term debts for short-term* needs.
Among the key benefits of a tax loan are better controls over cash flow; fixed monthly payments offering valuable predictability; flexible repayment terms to fit in with trading patterns; and fast payment transfer.
The application process is also quick and simple. You can apply for a Bank of Ireland tax loan up to €120,000 over the phone or online with no paper application forms required and a speedy response guaranteed – vitally important with the tax deadline approaching fast.
The advantages of a short-term tax loan centre around preserving cash for when it can be used most productively for a business
While the use of short-term personal loans to meet tax bills is on the rise, quite a few business owners are still not availing of the option, despite the attractive terms on offer.
"The advantages of a short-term tax loan centre around preserving cash for when it can be used most productively for a business. “Most retailers, for example, need to invest heavily in stock in the run up to Christmas when much of their annual profits will be made. Many farmers who had a profitable 2017 have a corresponding tax bill now to be paid. They may need to prioritise feed for their stock at this time, given the extreme weather conditions from earlier this year,” he adds.
“The other key benefit of taking out a Bank of Ireland tax loan is the credit record it helps establish for the business,” Lauhoff says. “Banks naturally like borrowers to have a track record of repaying loans on time. Strategic borrowing like this means that when the business needs a loan for a significant capital investment a good credit record has already been established, which will improve the likelihood of being approved for longer-term funding.
For further information about a loan to help manage your tax bill from Bank of Ireland, visit bankofireland.com/taxloans
Lending criteria and terms and conditions apply. Over 18's only. *Max term 11 months. ** For more information please go to www.revenue.ie. Bank of Ireland cannot take responsibility for information on third party websites