VAT bill funding takes the pressure off legal firm’s cash reserves
In October United Trust Bank were approached by one of our broker partners, Professions Loans Limited, in order to renew an existing funding line for a mutual client. The proposal was introduced directly to UTB by a director of Professions Loans, Andrew Carr, who has been operating in the specialist Professions finance sector for a number of years. UTB have had the pleasure of funding multiple agreements for Andrew over the course of this financial year.
The client was a large law firm, which regularly seeks funding for its quarterly VAT liabilities, given that the sum payable usually represents a sizeable slice of their cash resources. The firm employs well over 450 people and covers multiple areas of law, including a large exposure to government-funded cases. Recently they have also successfully bid for some new legal-aid contracts, so preserving cash for upcoming disbursements and general working capital remains a priority.
One of the ever-present challenges for firms of this nature is an increase in debtors and “lock up”. They are indicators of growth but also of a slow cash-collection cycle which is typical when a firm has any reliance on payments received from the Legal Aid Agency or long-term cases. Cash flow pressure from increased growth is not just limited to small firms, as any practice which achieves a period of growth without an improvement in their lock-up days will get to a point where traditional working capital facilities, bank overdraft and cash reserves can become overburdened. Fortunately, our quarterly VAT funding loans provide an excellent addition to traditional lines of funding.
Andrew Carr, director of Professions Loans Limited, commented on his experience of dealing with United Trust Bank:
“I’ve always been very happy with the quick, professional and in-depth service from UTB and hopefully we will continue growing the relationship and fund a lot more deals in the future”.
United Trust Bank is continuing to develop its products and services to meet the needs of the professions market and UTB’s Professional Lending team was delighted to receive such positive feedback from a valued broker partner.
Loan size – £150,000