Executor Loans UK: Borrowing against an estate for liquidity

• An Executor Loan allows executors to borrow money against the value of an estate when they don’t have enough cash to pay estate costs.
• These loans may also be called Probate Loans, Inheritance Tax Loans or Estate Advances.
• If you are managing an estate that is asset-rich but cash-poor, Provira’s Estate Advance can provide access to up to 50% of the net value of the estate within days.

Executor Loans exist to help executors cover urgent estate costs when they don’t have the cash available to do so.

On paper, an estate can be worth hundreds of thousands or even millions of pounds, and yet still have very little money available to spend. 

This happens when most of the value of the estate is tied up in property, a business, land or other assets that can’t be sold until probate has been granted. At the same time, Inheritance Tax, funeral costs, legal fees and property expenses may still need to be paid. 

An estate that has high value on paper with limited cash available to spend is called an illiquid estate.

If you are facing this problem as an executor, Provira’s Estate Advance can help you access up to 50% of the net value of the estate within days. We only charge simple interest, not compound interest and never ask you for a personal guarantee.

To apply for an Executor Loan with Provira, get in touch with the team today.

What is an Executor Loan?

An Executor Loan is a specialist loan designed to help executors pay estate costs during the probate process. 

It allows an executor to borrow money against the value of the estate, rather than relying on their own income, property, savings or credit history to secure the loan.

Unlike regular bank loans, the money must be used only for estate costs like:

• Paying Inheritance Tax
• Covering funeral expenses
• Paying legal, accountancy, valuation and probate fees
• Insuring or maintaining an estate property
• Carrying out repairs before a property is sold
• Paying debts owed by the estate

The loan is normally paid back directly from the estate once probate has been granted and some of the high-value assets have been sold.

What other names do Executor Loans go by?

Executor loans are described in a number of different ways.

You may see them referred to as:

• Estate Advances
• Estate Loans
• Probate Loans
• Inheritance Tax Loans

Whilst these loans are broadly the same, there might be some difference in what they are used for. For example, an Inheritance Tax Loan might be used only for Inheritance Tax, whilst an Estate Advance might be used for wider estate costs, including property maintenance and legal fees.

How does an Executor Loan work?

Whilst the exact process varies between lenders, securing an Executor Loan will usually involve:

1. The executor applies for the loan

The application must first be made by a named executor or an administrator who is legally allowed to deal with the estate.

The executor will be asked to provide information about the estate’s assets, debts and expected net value.

2. The lender looks at the estate

Unlike when someone applies for a bank loan, a specialist Estate Loan lender will focus on the value of the estate rather than the executor’s salary or credit score.

The lender may ask for documents like:

• The death certificate
• The will
• Details of estate assets
• Property valuations
• Estate liabilities
• Inheritance Tax calculations
• Information about the status of the probate application
• ID documents

3. An offer is made

If the lender is happy with the estate value, they will make an offer that will tell executors how much they can borrow, any associated fees and when repayment is expected.

4. The money is sent

The advance may be paid to the executor, the solicitor dealing with probate or directly to HMRC, depending on what the money is being used for.

5. The estate repays the loan

There are normally no monthly repayments with Executor Loans. Instead, the loan, interest and fees are paid to the lender directly from the estate once probate has been completed. 

That way, executors don’t need to worry about keeping up with monthly payments if the process takes longer than expected.

Why might an executor need an Executor Loan?

An executor may need an Executor Loan in a number of situations, including:

The estate has a big Inheritance Tax bill it can’t pay

In the UK, Inheritance Tax must be paid within six months of the date of death. This is normally charged at 40% above the tax-free allowance.

For estates that have a lot of money tied up in assets with little cash available to actually pay the tax, this can create a difficult situation. What makes it harder is that estate assets can’t be accessed or sold before probate is granted, but Inheritance Tax needs to be paid first.

In this case, an Executor Loan can provide the money needed to pay HMRC and unlock probate.

Most of the estate’s value is tied up in property

If the estate has a lot of value tied up in property with very little available cash, executors might struggle with ongoing property maintenance whilst the probate process is being completed.

This is because probate can take up to 12 months to complete, but whilst it’s ongoing, the executor still needs to cover property costs like insurance, council tax, mortgage payments, repairs and maintenance.

Borrowing against the estate allows these costs to be paid while the properties are being prepared to be sold. 

A property needs work before it can be sold

In some cases, an inherited property may need to be repaired before it can be sold for a reasonable sale price.

Selling in its current condition could mean accepting a much lower offer, which could mean beneficiaries receive a lower inheritance than they would otherwise be getting.

An Estate Advance could help fund the repairs, giving the executor time to sell properly rather than accepting a lower price.

Legal or professional costs 

A complicated estate may need solicitors, accountants, surveyors or specialist valuers to consult the executors and help them administer it properly.

Those professionals may need payment before the estate has access to the cash tied up in property or stocks.

Borrowing this money through an Executor Loan can help the executor get the advice they need, without taking on the cost themselves.

Is an executor personally responsible for an Executor Loan?

It depends on the type of loan you choose, but with a specialist company like Provira, an executor is not personally responsible for the loan.

However, if the executor takes out a bank loan or bridging loan, then they may be asked for a personal guarantee, a credit check or security over their property.

At Provira, we don’t believe that acting as an executor should mean putting your own home or savings on the line.

How much can an executor borrow with an Executor Loan?

The amount an executor can borrow depends on the net value of the estate, once assets, debts and liabilities are taken into account.

Provira’s Estate Advance allows executors to access up to 50% of the net value of the estate within days.

How much does an Estate Advance cost?

At Provira, we charge an arrangement fee of between 1% and 2% of the advance. On top of this, the interest rate is between 1.5% and 2% per month with interest capped at 30 months.

Importantly, Provira charges simple interest rather than compound interest, meaning you’ll never pay interest on interest.

There are also no early repayment fees, so if the estate is settled sooner than expected, you won’t end up paying more.

How Provira can help with executor loans

Administering an estate can be a complicated task, especially when a lot of the estate’s value is tied up in property or other illiquid assets.

Executors may be asked to pay a big tax bill, protect an empty house, settle legal fees and make important financial decisions while they are also grieving.

When the estate has value but no accessible cash, that responsibility can feel overwhelming.

Provira’s Estate Advance provides executors with access to up to 50% of the net value of the estate, often within days.

Applications are assessed against the estate rather than the executor personally, with:

• No personal guarantees
• No credit checks
• No monthly repayments
• No early repayment fees
• No personal liability if the estate is less valuable than expected
• Simple rather than compound interest

Provira can also work directly with solicitors and pay Inheritance Tax to HMRC, helping make the process as simple as possible.

If you are administering an illiquid estate and need money to pay Inheritance Tax, legal fees or other urgent expenses, get in touch with Provira today. 

Our compassionate team can explain your options clearly and help you decide whether an Estate Advance is right for you.