Aldermore has launched VAT loans to cover the VAT due on land and property.

The bank said its launch follows demand from housebuilders and developers.

The new loans, available when taken out with an Aldermore development finance facility, will help housebuilders and developers reduce their initial cash flow commitment when purchasing land and property elected for VAT.

Aldermore said the introduction of VAT loans for property development finance customers will help speed up the development process.

Simon Knowles, head of property development at Aldermore, said: “The purchase of a property that is elected for VAT can pose a real problem for SME developers when it comes to cash flow. This payment can have a negative impact on a developer’s ability to progress the early stages of their development.

“The introduction of this new facility will ease the initial cash flow impact and allow the developer to focus on getting the development started.”

In June 2019, the bank introduced commercial mortgage VAT loans as part of its strategy to further support its customers.