Why would you get a loan to pay out a tax debt?
In the simplest of terms; there are two kinds of payment plans with the ATO – those that work for you and those that don’t. If your payment plan suits your business that’s great but if it doesn’t the repayment obligations can create a massive strain during what is a tough time for many businesses.
The most common problem business owners have with their ATO payment plan is they’re much too short for what their business can manage comfortably with their cash flow needs.
How does a business loan help?
A loan can extend those terms out to 12 months, 2 years, more depending upon the kind of business loan that suits your circumstances.
Another reason is the peace of mind knowing your outstanding ATO balance is taken care of.
The action the ATO can take against a business is substantial. They include garnishee notices, Director Penalty Notices, reporting to credit agencies all the way to wind up notices.
For many this is enough to use the solution a business loan offers rather than an onerous payment plan.