Exclusive: Unsecured VAT bridging lender launches

Exclusive: Unsecured VAT bridging lender launches

A brand new lender has launched today its unsecured funding service which can help property investors at risk of losing out on a purchase.

London-based BloomSmith VAT Bridging provides unsecured short-term loans to borrowers in need of the funds to cover the VAT on a property purchase.

As BloomSmith does not need to put a charge on the property, it sits alongside other lenders who have first and second charges, while increasing the borrower’s funding resources in a way that has not been seen before in the market.

BloomSmith, founded by property entrepreneurs Peter Bloom and Nigel Smith, and led by managing director and chartered surveyor Matthew Hill, also manages the entire VAT reclaim process with HMRC for the borrower.

Peter Bloom, director and co-founder of BloomSmith

“Everyone has a story of the deal lost because of the VAT,” said Peter Bloom, director and co-founder of BloomSmith.

Previously, Peter had his own near-miss after forgetting about the VAT on a property purchase just two days before completion and not having the cash to cover it.

Before the banking crisis, property investors used to get the VAT covered by an extra funding line, however, now only a limited number of lenders are willing to lend the 20% VAT bill on top of the LTV they are already providing for the property.

Peter managed to salvage his deal after borrowing money from a friend to pay for the VAT. This then sparked the idea to start BloomSmith.

“We’ve launched this service because there are no other sources for financing VAT in the property-lending market with this approach,” Peter added.

“We spent a lot of time making sure we could offer this to our clients securely, making sure all the regulatory compliance worked and that we can provide funds to people in five days from a cold start, if necessary.”

BloomSmith has been test-trading quietly for the last year and client-feedback on the product has been very positive.

“They like the simplicity of our process and that we do all the leg-work with HMRC on the VAT recovery.

“The brokers and the senior lenders we’ve worked with also appreciate what we are doing.”

Colin Burns, tax partner at Gerald Edelman, said: “Based on the experience of our many clients, we see that BloomSmith is providing a perfectly neat and cost-effective solution to the funding gap in these types of real estate transactions.

“Purchasers can use BloomSmith’s funding to complete property acquisitions that might otherwise be unaffordable.”

BloomSmith offers loans from £50,000 and has no maximum limit, subject to discretionary approval and terms and conditions.

Visit BloomSmith’s website for more information or call one of the team on 020 3488 3411 for more information.


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    Michael Jaxin

    I need a 20,000 pound bridging loan I have a guarantor that is not a home owner

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