Clear the debt, keep trading
ATO tax debt loans
Pay the ATO out in one hit and repay it over a term that suits your cash flow, instead of carrying the general interest charge.
ATO and Tax Debt Finance at a glance
- Amount
- $10,000 to $500,000
- Term
- 3 to 36 months
- Security
- Often unsecured. Property security can improve pricing on larger amounts. A director's guarantee is standard.
- Time to funding
- 2 to 5 business days. Tax debt narrows the lender panel, so it takes slightly longer than a standard unsecured loan.
- Typical use
- Overdue BAS, PAYG withholding, unpaid superannuation, an income tax assessment, or paying out an existing ATO arrangement
- What you'll need
- An ATO integrated client account statement, ABN, Australian photo ID, and 6 months of bank statements
What it is
What is ATO tax debt finance?
ATO tax debt finance is a business loan used specifically to clear an outstanding tax liability - BAS, PAYG withholding, superannuation or an income tax assessment. You settle the ATO in full and repay the lender over an agreed term. The debt does not disappear; it moves from a regulator to a commercial lender with a fixed repayment you can plan around.
Businesses do it for three reasons. To stop the general interest charge compounding on the balance. To keep a reported tax debt off their credit file, which can happen once a debt meets the ATO's disclosure criteria. And because an ATO payment plan sitting on your file limits what any other lender will approve, which blocks the equipment or working capital you need to trade your way out. Not every lender funds tax debt - some exclude it outright as a use of funds, which is why this deal is worth broking rather than applying blind.
Worked example
A worked example
- A transport business owes $80,000 across three quarters of BAS and PAYG.
- The ATO's general interest charge accrues daily on the balance until it is cleared, and the rate is set by the ATO each quarter. [[NEEDS-MATT: confirm current GIC rate before publishing a figure]]
- The business borrows $80,000 over 24 months and pays the ATO out in full.
- At an indicative 15% p.a. the repayment is about $3,879 a month, and the total repaid is roughly $93,100.
- With the debt cleared, the business is no longer carrying an ATO arrangement when it applies for the truck finance it needs in six months.
Compare the total cost of the loan against the general interest charge you would otherwise accrue, plus what the arrangement is costing you in borrowing capacity. Your accountant should run both numbers.
Is this right for you?
Is ATO tax debt finance right for you?
Good fit if…
- You have a BAS, PAYG or superannuation liability you cannot clear in one payment.
- Your lodgements are current, or you have a clear plan to bring them current.
- You want to avoid the ATO disclosing the debt to credit reporting bureaus.
- An existing payment plan is limiting what you can borrow for equipment or working capital.
Probably not if…
- The business is not viable and the tax debt is a symptom. Borrowing extends the timeline, it does not fix it. Speak to an insolvency practitioner instead.
- You are years behind on lodgements with no plan. Most lenders want lodgements current even when payment is not.
- You have a manageable ATO payment plan at a rate below what a lender will charge, and it is not blocking anything.
- You would be borrowing to pay this quarter's BAS every quarter. That is a pricing or a margin problem, not a finance problem.
- You have not spoken to your accountant. This is one decision that should never be made without them.
What it costs
What ATO tax debt finance costs
Most lenders treat tax debt as a higher-risk use of funds and price it that way. Compare it against what the ATO is charging you, not against a standard business loan.
- Interest rate
- Our panel prices business finance between 6% and 20% p.a. Tax debt sits at the upper end because the panel is smaller and the use of funds is considered higher risk. Offering property security moves it down.
- Establishment fee
- A one-off fee, usually deducted from the advance - so borrow enough to cover the ATO balance after the fee comes out. It runs 2% to 4% of the amount advanced.
- Ongoing fees
- A monthly account fee is common. It is usually $10 to $25 a month.
- Paying it out early
- Ask before you sign. If the business recovers faster than expected, an interest rebate on early payout is worth real money on a 24-month term. Not every lender offers one. About a third of the lenders that write tax debt will rebate the unearned interest; the rest hold you to the full agreed payback.
Bizzloans is a broker, not a lender. The lender that funds your deal pays us a commission, which we disclose to you. You pay us nothing to compare.
Eligibility
Who can apply
- A valid ABN
- Current Australian photo ID
- In business more than 6 months
- Monthly turnover above $6,000
- Bad credit considered
- Lodgements up to date, or a clear plan to bring them up to date
Don’t meet these? Call us — we have lenders for most situations, and we’ll tell you straight if we don’t.
Book a callWhat you'll need
What you’ll need
No documents
To get a quote
- Nothing. Tell us the amount owing, roughly when it fell due, and whether your lodgements are current.
- No credit file is pulled to compare.
Once you pick a lender
To settle
- An ATO integrated client account statement or portal screenshot showing the balance
- 6 months of business bank statements
- Your ABN and a current Australian photo ID for each director
- Details of any existing ATO payment arrangement
- Loan agreement, director's guarantee and direct debit authority
How it works
How it works
5 minutes
Tell us the number and the age
How much is owing, which quarters it relates to, whether there is a payment plan in place, and whether lodgements are current. All four change which lenders will fund it.
1 to 2 business days
We go to lenders comfortable with tax debt
Not all of them are. Applying blind to a lender that excludes tax debt as a use of funds wastes a week and leaves an enquiry on your file. We only approach the ones that fund it.
2 to 5 business days
Settle the ATO, repay the lender
Funds are advanced so the liability can be paid out in full, and you repay the lender weekly or monthly over the agreed term. Keep the ATO receipt - it is what closes the arrangement out.
This vs the alternative
Tax debt loan vs an ATO payment plan
Both spread the cost. They have very different consequences for what you can borrow next.
| Tax debt loan | ATO payment plan | |
|---|---|---|
| What it costs | A commercial interest rate plus fees, fixed and known at the start. | The general interest charge, which compounds daily and is reset by the ATO each quarter. |
| Effect on other borrowing | Treated as a normal business loan by other lenders. | An active arrangement is visible and routinely reduces what other lenders will approve. |
| Credit file | The tax debt is cleared, so it cannot be disclosed by the ATO. | The ATO may disclose the debt to credit bureaus where it meets their published criteria. |
| Flexibility | Fixed term, fixed repayment, no renegotiation needed. | Can be renegotiated with the ATO, but defaulting can cause the full balance to fall due. |
| Best for | A viable business where the arrangement is blocking other finance. | A short, small liability you will clear quickly without needing to borrow elsewhere. |
Deductibility of the general interest charge changed for periods from 1 July 2025, while interest on a business loan is generally deductible. That change alone can move the comparison. [[NEEDS-MATT: confirm this line with our accountant before publishing]]
What to do before you apply
- Pull your integrated client account statement from the ATO portal so you have the exact balance, not an estimate.
- Bring lodgements current, even if you cannot pay. Most lenders will accept an unpaid but lodged position; very few accept unlodged.
- Ask your accountant to compare the general interest charge against the loan cost, including deductibility.
- If there is unpaid superannuation in the balance, say so. It is treated differently from BAS and PAYG by both the ATO and by lenders.
FAQ
ATO and Tax Debt Finance questions
Will the ATO know I borrowed to pay them?
Can the ATO report my tax debt to credit agencies?
Is it cheaper than an ATO payment plan?
Do I need to be up to date with lodgements?
Can I borrow to pay unpaid superannuation?
What if I already have a payment plan?
Will this stop a director penalty notice?
Do all lenders fund tax debt?
What if my business is not viable?
A person reads this, not a scoring engine
A named advisor takes your file to the lenders on the panel that fund your industry and your turnover — and tells you plainly when ATO tax debt finance is the wrong answer and what to use instead.
Ready when you are
Compare ATO and Tax Debt Finance today
Comparing is free, you’re never locked in, and checking won’t affect your credit score. If we can’t help, we’ll tell you that too.
