PAYE arrears funding
PAYE and NIC arrears are visible to lenders as soon as they pull an HMRC report or ask. Most high-street banks decline at this point. UK specialist working-capital lenders, asset-finance routes, and MCA against card takings are the three live options. The earlier you act (before a Notice of Enforcement from HMRC), the more lenders engage.
The three live routes
- Specialist unsecured working capital. £10k to £250k, decision 48 to 96 hours, PG from directors. Specialist underwriters who price the HMRC risk into the rate.
- Asset refinance. If you own commercial vehicles, plant, or machinery free of finance, sale and leaseback releases capital that can settle the arrears. 70 to 90% LTV, 7 to 14 day drawdown.
- Merchant cash advance. If your business takes meaningful card payments, MCA funds against next 6 to 12 months of takings. Same-week funding, repayment as a share of daily card receipts. Highest cost option but the fastest.
What lenders need to see
- Bank statements showing the operational issue is cashflow timing, not declining demand
- An HMRC statement with the current arrears balance and any existing TTP arrangement
- Filed accounts or up-to-date management accounts
- A credible explanation for how the arrears built up: late client payments, project delay, one-off bad debt, seasonal trough
FAQs
Can I borrow money to clear PAYE arrears?
Yes, but the lender pool narrows once HMRC arrears are visible. Specialist working-capital lenders, asset finance against unencumbered plant, and merchant cash advance against card takings are the three most common routes. Mainstream high-street banks usually decline once PAYE arrears are showing.
Will HMRC chase me harder if I take on more debt?
HMRC Debt Management views funded clearance as positive (your obligation is met). They will not stop a Time To Pay or enforcement action mid-flight unless the arrears are cleared in full. Some lenders pay HMRC direct on drawdown to remove ambiguity.
What documentation do PAYE arrears lenders ask for?
Last 6 months of business bank statements, current trial balance or management accounts, an HMRC statement showing the arrears balance, and a list of director information for personal guarantees. Some lenders also ask for the HMRC TTP letter if one is in force.
How much can I borrow?
Typically £10k to £250k for unsecured working capital. Secured against assets, £50k to £1m+. Repayment term 6 to 24 months on unsecured; up to 60 months on asset-secured. Decision in 48 to 96 hours.
Will my directors need to give personal guarantees?
For unsecured PAYE arrears funding, yes, almost always. PGs from directors with 25%+ shareholding. Some lenders cap PG exposure at 50% of the facility; others require unlimited PG. We disclose PG terms per lender in the panel match.
What if PAYE arrears are already with HMRC enforcement?
Once a Notice of Enforcement has been issued and bailiff visits scheduled, the lender pool shrinks to a handful of specialists. The conversation usually pivots to bridging or asset-secured working capital rather than mainstream unsecured. Speed matters: 24 to 48 hours can be the difference between an option and no option.
To get matched to PAYE-arrears-friendly lenders: eligibility checker. Limited companies, LLPs and partnerships of 4+ only.