Running a successful business in Australia involves meeting various tax liabilities, including Goods and Services Tax (GST), Pay As You Go (PAYG), and Superannuation obligations. But, with the impacts to COVID, rising supply costs, rising interest rates and other economic pressures on business, many have found themselves behind in their payments to the ATO.
Payment plans make a difference to many business owners struggling to keep up with their obligations but many complain the tax offices payment plans are over too short a time period and don’t take other factors into account. There are lenders who help with paying out tax debt. In this article we explain the features of loans to pay out the ATO and why a business owner may choose a tax debt loan solution.
Avoid Directors Penalty Notices (DPNs)
The ATO defines a DPN as a notice they will give you to recover unpaid tax – the notice outlines the unpaid amounts. The tax office can also issue garnishee notices to recover the amounts covered by the DPN and, as a director, you can become personally liable for your company tax debts.
There are loan solutions designed to help you avoid costly penalties and ATO enforcement actions, like Directors Penalty Notices (DPNs).
Minimize ATO Penalty Interest and Charges
Dealing with penalty interest and other charges levied by the ATO can be daunting. Using a tax debt loan solution can stop further interest charges and penalties occurring by clearing your ATO balance.
Extended Payment Terms
Many business owners complain that the payment plans offered by the ATO simply don’t take into account the business cash flow needs of their business and they need longer terms. With a variety of loan options available, business owners can access terms of up to 5 years with unsecured loans and even longer on some forms of secured commercial loans.
Time is often of the essence when dealing with tax debts – particularly if a Directors Penalty Notice has been issued. Our fast loan solutions ensure that you can secure the funds you need quickly to resolve your tax liabilities and avoid further complications. Bridging finance and same day funding is also available – even if you don’t have property security.
When looking into the right tax debt loan solution for your business it’s important to choose the right loan that best suits your position. Loans secured by property will typically offer the lowest rates, but there are discounted unsecured rates based on turnover and credit rating so it’s worth understanding all of your options.
Overdrafts for Tax Debt Payouts
Our unsecured overdraft facility provides you with access to additional funds when needed to cover your tax debt. A genuine revolving line of credit provides up to 4 years extended term to pay down your tax debts or can provide the support for short periods when business cash flow is tight. Many business owners use an overdraft as a cash flow backup in addition to ATO payment plans to help support them stay compliant with their payment plan.
Unsecured Loans for Tax Debt
Whilst major banks won’t provide loans for paying off tax debt many unsecured lenders are happy to provide funding to pay out the ATO. This provides a solution to business owners who don’t own property or don’t wish to use property as security for their business lending. The other benefit of using an unsecured lender is their no-doc loan application process. The loan application can be without financials for loan amounts up to $500,000.
Short-term Property Loans for ATO Debt
Bridging finance and short term property loans, like second mortgages, can be used when paying off tax debt. For those considering using their property, a short term property loan can be a bridging finance solution that steps in while you wait for major bank funding to settle or make sure you are compliant with bank lending policy.
If you’re not sure if your tax debt could affect your major bank lending or existing finance we recommend you talk to an expert to make sure you don’t get any nasty surprises during your annual reviews. Talk to an expert here.
Private Lending Solutions
For businesses seeking alternative financing options, there are private lending solutions that can be accessed for tax debt loans. Private lenders do not credit score and their application process is focussed on the value of the security offered and a suitable exit plan. These features make them a viable tax debt loan solution for those with bad credit to pay out your ATO debt.
Private lenders prefer interest only loans and offer capitalised interest which can mean no repayments for up to a year. The benefit of a private loan solution can ease cash flow but it’s important to get expert advice to make sure this is the right loan solution for your business.
Catering to Start-ups and Established Businesses
We provide loan solutions for businesses of all sizes and stages, from start-ups to established enterprises. No matter where you are in your business journey, we have a solution for you.
Don’t let a poor credit history hold you back or a lack of financials. We offer bad credit solutions to help businesses with less-than-perfect credit histories secure the funds they need to cover their tax liabilities.
By choosing our tailored tax debt loan solutions, you can effectively manage your tax liabilities and keep your business thriving. Contact us today to discuss your options and find the perfect solution for your business.
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