A commercial property buyer can have the deposit and acquisition finance arranged, yet still face a substantial VAT payment before the transaction can complete. Brickflow's renewed partnership with BloomSmith highlights an existing specialist route for funding that temporary cash requirement.
The announcement on 27 October 2026 confirms that BloomSmith remains Brickflow's exclusive VAT bridging provider. This is a renewal of the platform partnership, rather than the launch of a new lending product.
The completion-day problem
Where a £1m purchase price is quoted excluding VAT and the entire sale attracts VAT at 20%, the buyer needs a further £200,000. Potential recovery later does not provide the cash required to complete.
A VAT bridge may address that timing gap. The first checks are whether VAT is correctly chargeable, how much is recoverable and how the borrowing will be repaid.
What the published funding route offers
| Feature | Published position |
|---|---|
| Minimum facility | £50,000 |
| Indicative monthly interest | 1.25%; individual terms and fees require confirmation |
| Funding speed | Advertised as little as 48 hours, subject to the transaction being ready and approved |
| Property security | No fixed legal charge, according to the published proposition |
| Indicative standard term | 90 days, according to BloomSmith's product information |
The figures describe the published proposition, not an offer for a particular borrower. A written quotation should establish the total amount repayable, all fees, payment arrangements and any conditions attached to the facility.
Confirm the VAT treatment before arranging the finance
Not every commercial purchase carries an additional 20% VAT bill. HMRC explains that supplies of land and buildings are normally exempt, but an option to tax will generally make the relevant supplies standard-rated. Recovery of VAT depends on the buyer's circumstances and intended activities.
A qualifying transfer of a business as a going concern, often called a TOGC, can receive different treatment. The rules include specific conditions for property transfers. Buying a tenanted building does not, on its own, establish that those conditions have been met.
Willow's view is that the accountant and commercial solicitor should establish the tax position before a funding solution is selected. Borrowing to pay an incorrectly assumed VAT liability would solve the wrong problem.
How a £1m purchase can create a £200,000 cash requirement
| Item | Amount |
|---|---|
| Property price, excluding VAT | £1,000,000 |
| VAT at 20% | £200,000 |
| Price including VAT | £1,200,000 |
This excludes land transaction taxes, legal costs, lending fees and other acquisition expenses. It also assumes the VAT remains payable at completion. The deposit and senior loan are separate parts of the funding calculation.
For a business buying trading premises, using available cash for VAT may reduce the funds left for stock, fit-out or working capital. For an investor, it may use reserves intended for repairs or another acquisition. The practical comparison is the cost of a specialist facility against the effect of committing that cash.
Compare the full cost with the value of retaining cash
On an illustrative £200,000 advance, simple interest at 1.25% per month would be £2,500 for each chargeable month. Over three chargeable months, that would be £7,500 before fees.
This calculation assumes the principal remains unchanged, no compounding and three full monthly charges. It is not a lender quotation or a statement of how a particular 90-day facility is charged. Minimum interest, fees, early repayment terms and extension costs must be checked separately.
The absence of a fixed legal charge may help the facility sit alongside the main acquisition loan. It does not remove the debt or establish that an existing lender's consent is unnecessary. The solicitor should check the senior finance documents and any guarantees or other obligations in the proposed VAT facility.
What to establish before committing
In Willow's view, a useful review brings together five points:
- The liability: the agreed VAT treatment and the exact amount and date payable.
- The recovery: the accountant's assessment of recoverability and the expected net repayment.
- The timetable: completion, return submission, expected repayment and loan maturity.
- The cost: interest, fees and the consequences of early or delayed repayment.
- The contingency: how the loan would be repaid if the VAT recovery were delayed or lower than expected.
The renewed partnership confirms that a specialist route remains available. Whether it is the right route depends on the transaction, current lender access and terms, and the buyer's wider cash requirements.
Is VAT creating a gap in your commercial completion funds?
If the property price and deposit are covered but the VAT payment would absorb your working capital or investment reserves, Willow can review the short-term funding requirement alongside the acquisition finance.
Bring the purchase price, VAT amount, completion date and your accountant's recovery assessment. We can assess available funding routes and the repayment plan with your professional advisers.
Explore bridging finance for your transactionFrequently asked questions
Does every commercial property purchase attract VAT?
No. Many property supplies are exempt. An option to tax or other rules can make a transaction taxable, while qualifying transfers of a going concern receive different treatment. Your tax adviser should confirm the position.
Is this a new VAT bridging product?
No. The 27 October 2026 announcement renews the Brickflow and BloomSmith partnership. It continues access to an existing specialist funding route.
Does a VAT bridge replace the commercial mortgage?
It is designed to fund the eligible VAT requirement alongside the acquisition funding. The property purchase price, deposit and other costs still need to be covered.
Is funding within 48 hours guaranteed?
No. The advertised timescale is indicative. Eligibility, documentation, legal work and lender approval must be completed, so the funding date should be confirmed for the individual transaction.
What happens if the VAT repayment is delayed?
The loan agreement governs repayment and any extension. Confirm potential extra charges and an alternative repayment plan before borrowing. Do not assume that HMRC will repay the expected amount before the loan matures.