Proplend has completed its first ever investor-funded VAT loan.
The £1.8m loan was due on the purchase of a £9m property located in South London.
It comes after the peer-to-peer lender unveiled a VAT loan product in August to help property investors pay VAT due on purchases.
In this scenario, VAT of 20 per cent was chargeable to the purchaser of a building elected for VAT, which Proplend said can cause a short term cashflow issue for buyers who also need to put up a deposit.
The VAT loan was arranged within five days and was introduced by Opes Financial.
“Having been left in the lurch by a VAT lender who was unable to complete on the deal, we were very stressed,” Matthew Davies of Opes Financial said.
“Proplend came in and delivered the full £1.8m needed to fund the VAT extremely quickly in an almost seamless admin process.
Whilst this was a standalone VAT loan, Proplend investors will also able to fund both the senior debt and the VAT loan should the transaction require it.
“Given that 80 per cent of commercial properties in the UK are elected for VAT, we always saw VAT loans as a complementary addition to our existing product suite of short-term bridge and medium-term commercial property loans,” Brian Bartaby (pictured), chief executive of Proplend, said.