ATO debt loans

Tax debts creep up on good businesses. A quarterly BAS is paid late because a big customer was late. The next quarter arrives before the last is cleared. Before long, there is a growing balance with the ATO, interest accruing daily and letters arriving more often. An ATO debt loan pays the balance off in one go and replaces it with a repayment you control.

Why clear an ATO debt with a loan?

The ATO charges a general interest charge (GIC) on overdue amounts, set quarterly and compounding daily. From 1 July 2025, GIC and shortfall interest charge incurred are no longer tax deductible, which raises the real cost of carrying a tax debt. Clearing the debt also removes the pressure of escalating ATO action, which can include reporting larger overdue business debts to credit reporting bureaus in some circumstances.

When a payment plan may be the better answer

Not every tax debt needs a loan. The ATO offers payment plans, and debts of $200,000 or less can usually be set up online. A plan can be the cheapest path if:

• The debt is modest and can be cleared within a reasonable period.
• Cash flow comfortably covers the instalments plus new tax as it falls due.
• The ATO is satisfied with the arrangement and there is no firmer action under way.

Our side-by-side comparison shows how to weigh the two.

Quick sense check? Tell us the amount and the purpose. A person will call with an honest read, and your credit file stays exactly as it is.

Unsecured or property-secured?

	Unsecured ATO funding	Property-secured ATO funding
Typical size	$5k to $500k	$20k to $5m
Assessed on	Bank statements and turnover	The property, no valuation
Repayments	Regular, over months	Can be prepaid or added, so none during the term
Suits	Trading businesses with a moderate debt	Larger or older debts, recovering businesses

For larger debts, property security is often the difference between a loan that strains cash flow and one that gives the business room to recover.

What lenders want to see

• A current ATO statement of account showing the balance.
• Details of any existing payment plan and whether it is up to date.
• Lodgements brought up to date, or a plan to bring them up to date.
• Evidence the business can meet new tax obligations as they fall due.

If you have received a director penalty notice or a garnishee notice, tell us immediately and speak with your accountant. The timeframes in those notices matter. Read director penalty notices explained for background.

An illustrative example

A Geelong building contractor owes about $140,000 across three quarters of BAS after a developer paid late on a large job. The ATO has offered a payment plan, but the instalments on top of new BAS amounts would leave almost nothing for wages. The director owns a home with plenty of equity above the home loan. A second mortgage clears the ATO balance in one payment, with interest added to the loan for twelve months while the business catches up. The exit is a refinance once two clean years of lodgements are in.

The short version

• Clears the ATO balance in one payment
• Stops the general interest charge building on the debt
• Payment plans may suit smaller debts better
• Property security suits larger tax debts, with interest prepaid or added

What to expect from us

The process is built to avoid wasted time. The enquiry asks only what matters. The first call gathers what is missing. Statements are shared securely online, documents are signed electronically and any property security is prepared in parallel. Straightforward files can be approved within the hour, and funds can land within 24 hours once everything is signed. More complex files take a little longer, and you will be told why. Where a step is waiting on someone else, such as a co-owner’s signature, we will tell you so it can be chased.

Paperwork worth gathering

You do not need a folder of financial statements to start an enquiry. For most unsecured and property-secured funding, these few items cover the essentials:

• Photo ID for each director or owner.
• Access to your business bank account for a secure statement link.
• Your latest BAS, if it is handy.
• Details of existing finance, including any daily or weekly repayments.
• For property-secured funding, the property address and current loan balance.

About the questions we ask

Every question on the form is there for a reason: it changes which funding fits. Describe the business as it stands today rather than the version you expect in six months. Mention any default, tax debt or recent decline in the notes. We look at those situations all the time, and knowing early lets us head straight for options that can actually work.

Put your funding on call

The next step is simple: send us the basics and a real person will call. There is no credit check when you submit it, and nothing goes to another lender without you knowing. Fill the form in accurately, especially the amount and your monthly revenue, because those two answers decide which option fits and how quickly it can move.