Business Lending · ATO Debt
An ATO debt doesn't automatically close the door on finance.
Plenty of business owners assume a tax debt makes them unbankable. Some lenders do decline outright. Others will consider it, and some will lend specifically to pay the debt out. The difference is knowing which is which before you apply.
Last reviewed
Rebecca Tickner
Finance Broker · Maxfin
Sound familiar?
The problems I hear most often.
Your bank said no and didn't explain why
A tax debt shows up in the accounts, the application stops, and nobody tells you whether it was the debt itself, the size of it, or the fact that it wasn't on a payment arrangement. Each of those has a different answer.
Carrying the debt costs more than it used to
General interest charge accrues daily on unpaid tax. Since 1 July 2025, GIC and shortfall interest charge are no longer deductible, so the real cost of carrying a tax debt changed... your accountant can tell you what that means for your position specifically.
It may be visible to other lenders
The ATO can report business tax debts to credit reporting bureaus where the criteria are met. Once reported, it isn't just your problem with the ATO... it can sit on the business credit file that suppliers and lenders look at.
How It Works
Five stages. Walked together.
The same client journey from your first call through to settlement... and the loan reviews that follow.
Tap a stage to explore
01.
Discover
- 15-minute discovery call
- Hello Pack lands in your inbox
- Click “Get Started” to begin your Fact Find
02.
Plan
- Your Fact Find returned
- I assess your servicing
- You receive your Game Plan with my recommendation
03.
Apply
- Game Plan signed
- I lodge your application
- We wait... lender may come back with clarifying questions
04.
Approve
- Conditional approval
- Final conditions satisfied (e.g. insurance)
- Formal approval
05.
Settle
- Loan documents signed
- Settlement booked, solicitor takes the lead
- Loan settled!
In Practice
Tax debts build up for ordinary reasons. The question isn't how it happened... it's which lenders will look at it, and what it costs to keep carrying it.
Rebecca Tickner
What you get working with me.
Three different conversations, not one
Borrowing while a tax debt sits in the background, borrowing specifically to pay one out, and restructuring so the business can meet its obligations going forward are three separate propositions with different lenders behind them.
Access beyond the majors
Major banks are typically the least flexible on tax debt. Non-bank and private lenders assess it differently. Whether that suits you depends on your circumstances, and it's a trade-off I'll walk you through honestly.
The interest position changed in 2025
The ATO's position is that GIC and SIC incurred from 1 July 2025 are not deductible. Interest on business borrowing is treated under ordinary tax principles. What that comparison means for your business is a question for your accountant... it's frequently what prompts the conversation.
Clearing the debt can clear the record
Where a tax debt has been reported to a credit reporting bureau, the ATO removes that reporting once the debt is paid or you're effectively engaging with them on it. That can matter for future borrowing and for supplier credit.
Options across the security spectrum
Property-secured, unsecured, equipment-backed or invoice-based. What's available depends on the business, its assets and its trading position, and is subject to lender criteria and credit assessment.
No judgement about how it happened
Tax debts build up for ordinary reasons... a bad quarter, a slow payer, a GST bill that landed at the wrong time. I've had this conversation many times and it starts from where you are.
Questions
Frequently asked.
Can I get a loan if I have an ATO debt?
Often, yes. It depends on the size of the debt, whether it's on a payment arrangement, whether it has been reported to a credit reporting bureau, and the strength of the business behind it. Some lenders decline any tax debt outright and others assess it on its merits, so the answer depends heavily on which lender the application goes to. All lending is subject to lender criteria and credit assessment.
Can I borrow specifically to pay out an ATO debt?
Yes, this is a recognised purpose and there are lenders who will consider it. It can be structured as a business loan, or against property or other assets where they're available. Whether it makes sense for your business is something to work through with your accountant alongside the lending options.
Is interest on ATO debt still tax deductible?
No. The ATO's published position is that general interest charge (GIC) and shortfall interest charge (SIC) incurred on or after 1 July 2025 are not deductible, regardless of which income year the underlying debt relates to. Amounts incurred before that date remain deductible. How that affects your specific position is a question for your accountant or registered tax agent.
Will the ATO report my tax debt to credit agencies?
The ATO may disclose a business tax debt to credit reporting bureaus where all of these apply: you hold an ABN and aren't an excluded entity; you have one or more tax debts of which at least $100,000 is overdue by more than 90 days; you aren't effectively engaging with the ATO to manage the debt; and you have no active Tax Ombudsman complaint about the intended reporting. A formal Notice of Intent to Disclose is issued first, giving you 28 days to respond.
How do I get a reported tax debt removed from my credit file?
The ATO removes the reporting when you no longer meet the criteria... which generally means the debt is paid, or you're effectively engaging with the ATO to manage it, such as through a payment arrangement. Your accountant or tax agent handles that engagement.
Does being on an ATO payment plan help my application?
It often helps. A documented arrangement being met on time tells a lender the debt is being managed rather than ignored, and several lenders draw exactly that distinction in their policy. It isn't a guarantee of approval... every application is still assessed on its own merits.
Will applying hurt my credit file?
Applications generally leave a record, which is why it matters to approach lenders whose policy actually fits rather than trying several and hoping. Working out the likely fit before applying is a large part of what I do here.
Do you give tax advice?
No. I provide credit assistance... the lending side. Payment arrangements with the ATO, deductibility, and what's right for the business from a tax perspective are all matters for your accountant or registered tax agent. I'll work alongside them.
People reading this usually
Tell me where things sit
A few questions so I understand the shape of it before we talk. No figures needed at this stage, and nothing here commits you to anything.
Written & reviewed by
Rebecca Tickner
Finance Broker, Maxfin · Diploma of Finance & Mortgage Broking Management (FNS50322) · ASIC Credit Rep 571611 · MFAA Member
I built a seven-property portfolio with my partner. I structure clients' finance the same way I run mine.
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