Quick business loans for ATO debt

Tax debt is one of the most common reasons business owners come to us, and one of the most stressful. It builds quietly: a slow quarter, a BAS paid late, then another. Before long there’s a five or six-figure balance growing with interest charges, and letters from the ATO that are getting firmer. A quick loan isn’t always the answer, but when it is, timing matters.

Start with the ATO

The ATO offers payment plans to many businesses, and for a lot of owners that’s the right first step. Call the ATO or ask your accountant to. Find out whether a plan is available, what it would require, and whether any upfront payment is needed. If a plan works and you can meet it, you may not need to borrow at all, or you may only need to borrow the upfront amount.

When a loan makes more sense

• The ATO won’t agree a plan, or wants a large amount up front.
• A director penalty notice has arrived, and the window to act is short.
• The debt may be reported to credit bureaus, which could affect suppliers and other lenders.
• Interest charges keep compounding, and since 1 July 2025 they’re no longer tax deductible.
• You want one clear repayment rather than juggling a plan alongside other commitments.

The quickest routes for tax debt

Route	Why it suits ATO debt
Caveat loan	Fastest property-backed option for short-term clearing
Second mortgage	Longer term to repay, keeps your home loan in place
Private mortgage	Decides on equity and exit, flexible with tax debt and late returns
Unsecured loan	Smaller debts, lodgements current, steady trading

Property-backed lenders are generally the most comfortable with ATO debt, because their decision rests mainly on the property and the exit. Unsecured lenders will see the debt in your bank statements and may want to see a plan in place or lodgements up to date.

Lodge first

The single most useful thing you can do before applying is lodge everything outstanding: BAS, tax returns and any super guarantee statements. Lenders need to know the real size of the debt, and the ATO can make estimates of unlodged amounts that are higher than what you actually owe. Lodging also shows a lender the business is dealing with the problem.

An illustrative example

A Mackay mining services subcontractor owes the ATO $165,000 across GST and PAYG withholding after a major client went into administration owing it money. The company’s directors receive a director penalty notice. The ATO wants a substantial upfront payment before agreeing a plan. The directors own a home worth around $720,000 with $260,000 owing. A private second mortgage over the home pays the ATO directly within the week, and the directors repay over two years from ongoing contracts. Illustrative only.

Director penalty notices: act early

A director penalty notice can make directors personally liable for certain company tax debts. The options and time frames depend on the type of notice and whether lodgements were on time. This is an area where you need advice from your accountant or an insolvency professional before deciding anything. If borrowing is part of the answer, starting early gives the most room.

Don’t let a loan replace a plan for the future

Clearing the debt is half the job. The other half is making sure it doesn’t build again. Many owners we speak to set up a separate account and move GST and PAYG withholding into it every time customers pay, so the money is there when the BAS is due. Others switch to monthly BAS so the amounts are smaller and easier to manage. Ask your accountant which suits your business. A lender will also feel better about your file if you can show what’s changed.

What lenders will ask

• The current ATO balance, ideally from an ATO portal statement.
• Whether all BAS and returns are lodged.
• Any letters or notices you’ve received.
• Whether a payment plan has been offered or refused.
• The property details, if you’re using property.
• How the loan will be repaid.

Costs compared with doing nothing

Interest charged by the ATO compounds daily and is no longer deductible for the business. Escalation can include garnishee notices, credit reporting of the debt, director penalties and, ultimately, wind-up action. A loan has its own costs, so compare them honestly, but don’t compare a loan’s cost with zero. Compare it with what happens if the debt keeps growing.

Get on top of it

Tell us how much you owe, whether you’ve had any notices, and whether there’s property you could use. No credit check happens at the enquiry stage, your details stay with one person rather than going to a list of lenders, and that person will call you to talk through options frankly. Tell us the full picture, notices included, so the first answer is the right one. Start your enquiry.