Can you help with deposit support for asset finance?

Yes. We can connect you with providers who offer deposit support through unsecured top-ups, asset-backed refinance, or blended facilities. Approval depends on affordability, creditworthiness, and the asset being funded.

Do you arrange Hire Purchase (HP) with a balloon payment?

We can introduce you to lenders that offer HP with balloon structures (also called lease purchase). Balloons reduce monthly payments by deferring a larger final amount, which must be settled at term end. Balloon sizes are set against conservative residual values and usage assumptions.

How does a VAT-only loan work alongside HP?

The VAT-only loan typically covers the VAT portion of the asset price, allowing you to proceed with HP without paying the VAT upfront. After reclaiming VAT from HMRC, you can use the rebate to clear the VAT-only facility, subject to lender terms and your VAT position.

What are the risks of a balloon payment?

A balloon lowers monthly repayments but creates a large final liability. If the asset’s value is lower than expected or cash flow is tight when the balloon is due, you may need to refinance or inject cash. Always plan your exit and maintain the asset to preserve value.

It’s free to submit an enquiry to Best Business Loans. Any broker or lender fees, interest rates, and charges will be disclosed by the provider so you can compare the total cost before deciding.

How quickly can I get a decision?

Timeframes vary by provider, asset type, and the information you supply. Some can issue a quick eligibility check or Decision in Principle. Full approval requires underwriting and supporting documents.

Do you arrange VAT-only loans, deposit support, or balloon payments on HP?

Q: Do you arrange VAT-only loans?

We introduce established UK businesses to lenders and brokers that offer VAT-only loans for eligible asset or vehicle purchases. Terms, availability, and costs depend on your VAT status, credit profile, and the provider’s criteria.

Q: Do you support start-ups or sole traders?

We focus on established UK companies and LLPs. We do not currently support start-ups, sole traders, franchises, property finance, or commercial mortgage applications.

Short answer

Yes — we can introduce you to lenders and brokers that offer VAT-only loans, deposit support solutions, and Hire Purchase (HP) agreements with balloon payments. Best Business Loans is not a lender; we match established UK businesses with providers who may be able to help. Availability, terms, and costs depend on your business profile, credit standing, asset type, and provider criteria.

Understanding VAT-only loans, deposit support, and HP balloons

What is a VAT-only loan?

A VAT-only loan is a short-term facility that covers just the VAT portion of a VAT-eligible asset purchase. It’s commonly used alongside asset finance or HP to avoid paying the full VAT upfront. Businesses often reclaim the VAT from HMRC, then use the rebate to settle the VAT loan, subject to provider terms.

What is deposit support?

Deposit support is funding that helps cover the deposit required for asset finance, HP, or lease purchase. It can be structured as a separate unsecured loan, asset-backed top-up, or a blended scheme provided by some lenders. The goal is to ease upfront cash strain while maintaining affordable monthly payments.

What is a balloon payment on HP?

A balloon payment on HP (sometimes called lease purchase) is a larger final payment that reduces the monthly instalments during the term. You own the asset after clearing the balloon and any option-to-purchase fee. This is different from PCP, which typically includes mileage and condition criteria and may not suit all business assets.

Who are these options best for?

These options suit established businesses buying VATable equipment or vehicles and wanting to smooth cash flow. They are common in manufacturing, logistics, construction, agriculture, and professional services. Suitability depends on usage, asset life, seasonal cash flow, and accounting approach.

Clear, fair and not misleading note

These solutions can be helpful, but they add cost and contractual commitments. Always consider the total payable, repayment profile, and the impact on cash flow before proceeding. Independent professional advice may be appropriate for tax or accounting treatment.

How it works with Best Business Loans

Our process in four simple steps

Complete a Quick Quote: Share basic details about your business, the asset or purpose, and the funding amount needed.
AI-led matching: Our system analyses your profile and matches you with relevant lenders or brokers.
Introductions: We connect you with providers who may support VAT-only loans, deposit support, or HP with a balloon.
You decide: Review options, compare terms, and choose the route that fits your cash flow.

What lenders may look for

Time trading and accounts: Typically a history of trading and filed accounts or robust management information.
Credit behaviour and affordability: Evidence you can meet repayment obligations.
Asset details: Specification, age, use case, and expected residual value for HP with balloon structures.
VAT position: Confirmation of VAT registration and the HMRC reclaim process for VAT-only loans.

Typical structures you might see

VAT-only loan term: Often aligned to your VAT reclaim cycle (e.g., three months), subject to provider criteria.
Deposit support: Unsecured working capital loan, asset refinance to raise deposit, or a blended facility.
HP with balloon: A fixed term (e.g., 36–60 months) with a final balloon aligned to conservative residual value assumptions.

Important: VAT and HMRC

VAT-only loans are commercial finance products, not HMRC schemes. Your VAT reclaim depends on your VAT status, rules, and accurate returns. Seek professional tax advice if unsure about eligibility or timing.

Benefits, risks, and cash flow impact

Why businesses use these options

Cash flow smoothing: Spread upfront costs and keep working capital for operations or growth.
Faster investment: Acquire assets sooner without waiting for VAT rebates or building deposits.
Flexible structuring: Combine VAT-only support, deposit funding, and balloons to tailor repayments.

What to consider before proceeding

Total cost: Additional facilities increase interest and fees; focus on total payable, not just the monthly figure.
Term and residual risk: Balloons reduce monthly costs but require a larger final payment; plan the exit.
Eligibility: Not all assets qualify for balloons; lenders favour assets with predictable resale values.
Discipline: Use VAT rebates promptly to settle VAT-only loans if that’s the intended mechanism.

Cash flow scenarios to compare

Scenario A: Pay VAT upfront, standard HP. Higher initial outlay, normal monthly payments, simpler structure.
Scenario B: Use VAT-only loan + HP. Lower initial outlay, short-term VAT facility, then standard HP payments.
Scenario C: Deposit support + VAT-only loan + HP with balloon. Lowest upfront cost, lower monthly payments, larger final balloon to plan for.

Good practice tips

Stress-test: Model monthly cash flow and the final balloon under conservative revenue assumptions.
Set reminders: Diarise VAT reclaim dates and balloon maturity to avoid surprises.
Maintain assets: Protect residual values to preserve refinancing or disposal options at term-end.

Eligibility, sectors, and alternatives if you’re not a fit

Who we commonly help

Asset-rich, established SMEs in construction, manufacturing, logistics, and professional services.
Vehicle fleets and plant operators seeking HP with balloon options backed by sensible residuals.
Agriculture and agri-food businesses investing in kit where VAT-only funding may assist cash flow.

If you operate in agriculture, you may find our sector guidance useful. See our page on farming loans for more context.

What if you’re not eligible?

Standard HP or lease: Proceed without VAT-only or deposit support where affordability allows.
Asset refinance: Release equity from existing machinery or vehicles to create a deposit.
Working capital facilities: Consider invoice finance, revolving credit, or a term loan for near-term needs.
Government-backed options: Providers using schemes like the Growth Guarantee Scheme may be accessible, subject to criteria.

Sector-specific notes

Vehicles: Lenders are typically more comfortable with mainstream commercial vehicles and sensible balloons.
Machinery and plant: Strong resale markets and maintenance records help with residual assumptions.
Technology and soft assets: Balloons are less common; deposit support may rely on unsecured top-ups instead.

VAT-only loan vs. HMRC Time to Pay

A VAT-only loan is a commercial facility and may be faster where approved. HMRC Time to Pay is a separate arrangement and subject to HMRC discretion. Your accountant can advise which route is appropriate for your situation.

FAQs, next steps, and compliance information

FAQs

Do you arrange VAT-only loans? We introduce businesses to providers that offer VAT-only loans as part of asset or vehicle purchases. Terms vary by lender, asset type, and your VAT position.

Can you help with deposit support? Yes, we can connect you with lenders and brokers that provide deposit support via unsecured funding, asset-backed top-ups, or blended facilities. Availability depends on affordability and credit profile.

Do you arrange HP with balloon payments? We can introduce you to providers who offer HP with balloon options. Balloon sizes are set conservatively against expected residual values and your usage profile.

How fast is a decision? Some providers can offer a quick eligibility check or Decision in Principle after you submit your details. Full approvals require underwriting and documents, and timing varies.

Do you support start-ups or sole traders? We currently focus on established UK companies and limited liability partnerships. Start-ups, sole traders, franchises, property finance, and commercial mortgages are not supported.

What does it cost? It depends on facility type, risk, term, and market conditions. Providers will disclose rates, fees, and total amounts payable so you can compare options clearly.

Get a Quick Quote

It takes a couple of minutes to submit your details for a free eligibility check. Our AI-led system will match you with suitable providers for VAT-only loans, deposit support, or HP with balloon. You stay in control and there’s no obligation to proceed.

Share your funding need and asset details.
Receive introductions to relevant lenders or brokers.
Compare terms and choose the option that fits your cash flow.

Important information and disclaimers

Best Business Loans is an independent introducer and does not offer loans or provide financial advice. Any funding is subject to the provider’s terms, status, affordability checks, and eligibility criteria.

Financial promotions must be clear, fair and not misleading. We aim to present balanced information, including key risks, costs, and limitations to support informed decisions. Consider seeking independent professional advice on tax, accounting, and legal matters where appropriate.

Late or missed repayments can have serious consequences for your business and your ability to obtain credit in future. Always assess affordability and total payable before entering into any agreement.

Key takeaways

We can introduce you to providers for VAT-only loans, deposit support, and HP with balloon payments.
These options are designed to smooth cash flow by lowering upfront costs and monthly payments.
They add cost and require discipline, so compare total payable and plan for the final balloon where relevant.
Eligibility depends on your business profile, asset type, and provider criteria — not all requests will qualify.
Submit a Quick Quote to explore your options with no obligation and clearer timeframes.

Updated: October 2025