Tax Debt Finance

Owing money to the ATO does not mean your options are limited.

Sierra Finance works with 50+ lenders who specifically offer finance to clear tax debt, giving your business a structured repayment that costs less than most ATO payment plans.

Whether you need to pay out an existing arrangement, settle a BAS obligation, or clear accumulated tax debt before it hits your credit file, we find the right lender and structure for your situation. Fast approvals, no obligation.

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How Tax Debt Finance Works

Tax debt finance replaces what you owe the ATO with a structured commercial facility that gives you more time, lower costs, and predictable repayments. The lender pays the ATO directly on settlement, clearing your obligation in full, and you repay the lender over an agreed term.

The structure depends on the size of the debt, what security is available, and how quickly you need it resolved.

Unsecured business loans are the most common structure for tax debt under $250,000. Approval is based on your business turnover and cash flow rather than property or equipment, and funding can settle within days. These suit businesses that need speed and have strong trading activity to support repayments.

Secured facilities use existing assets as security. If your business owns equipment, vehicles, or property, a lender can advance funds against that equity to clear the tax debt. Secured structures typically offer longer terms and lower costs than unsecured options.

Lines of credit and overdraft facilities provide ongoing access to funds, which can be useful for businesses that need to manage recurring tax obligations rather than a single lump sum. You draw what you need, repay, and draw again. If your business has seasonal cash flow that makes quarterly BAS payments difficult, this structure keeps you ahead of the cycle rather than constantly catching up. Learn more about how a business overdraft works.

Bridge finance suits urgent situations where the ATO has set a deadline or issued a formal demand. These are short term facilities designed to clear the debt immediately, with a plan to refinance into a longer term structure once the pressure is off.

What Tax Debt Finance Can Cover

Tax debt finance is not limited to income tax. Most lenders on our panel will fund the payout of any legitimate obligation to the Australian Taxation Office, including:

Income tax debts from annual returns, including accumulated balances across multiple financial years. This is the most common type of tax debt we see, particularly where a business has grown quickly and the tax bill has outpaced the cash reserves set aside.

BAS obligations covering GST, PAYG withholding, and PAYG instalments. Quarterly BAS payments are where most small businesses fall behind, especially those with seasonal revenue or long payment cycles from their own customers.

Superannuation guarantee charge debts, including the penalties and interest the ATO applies when super is paid late. SGC debt compounds quickly and carries personal liability for directors, making it one of the most urgent types of tax debt to resolve.

ATO payment plan payouts. If you are already on a payment plan, you can refinance the remaining balance into a commercial facility. Since July 2025, the interest the ATO charges on payment plans is no longer deductible for tax purposes, which means the effective cost of staying on a payment plan is significantly higher than most commercial alternatives.

Director penalty notice debts. Where the ATO has issued a DPN holding a director personally liable for unpaid PAYG or superannuation obligations, financing the underlying company debt can resolve the notice and protect the director's personal assets.

In many cases, tax debt can be consolidated with other outstanding business debts into a single facility. This simplifies repayments and can improve cash flow by reducing the total monthly commitment. A business loan structured to cover both tax debt and working capital needs is a common solution we arrange.

Who Tax Debt Finance Is For

Tax debt finance suits any Australian business that owes money to the ATO and needs a structured way to clear it. The situations we see most often include:

Established businesses behind on BAS. Trading well, revenue is strong, but quarterly obligations have stacked up. The debt itself is not a sign of a failing business. It is a cash flow timing problem, and lenders understand that.

Businesses on ATO payment plans. The interest and charges on ATO arrangements now cost more than most commercial finance. Refinancing the remaining balance into a facility with lower costs and tax deductible interest is a straightforward saving.

Seasonal and project based businesses. Construction, agriculture, hospitality, and trades businesses often earn unevenly across the year. A large BAS falls due in a quiet quarter and the debt begins to accumulate.

Growing businesses with capital gains exposure. A business that has sold property, equipment, or shares and faces an unexpected tax bill on the gain. The debt is a one off event, not a pattern, and lenders view these files favourably.

Businesses with credit blemishes. ATO defaults, paid or unpaid, do not automatically disqualify a business from finance. Several lenders on our panel assess the full picture, including current trading, the cause of the default, and capacity to service a new facility.

New ABN holders and businesses under two years. Options are more limited but not nonexistent. Secured facilities against equipment or property are available to newer businesses that may not yet qualify for unsecured lending. Low doc finance structures can also apply where full financials are not yet available.

Why Use a Broker For Tax Debt Finance

Tax debt is one of the areas where the difference between going direct to a lender and using a broker is most obvious. Every lender has a different appetite for tax debt files. Some will only fund BAS obligations, others will cover income tax but not SGC. Some require full financials, others will assess on bank statements alone. Some will pay the ATO directly on settlement, others require the borrower to manage the payout.

A broker matches the file to the right lender the first time. That matters because a declined application goes on your credit enquiry record, and too many enquiries in a short period make the next application harder. When you are already dealing with ATO pressure, the last thing you need is a string of declines because you approached the wrong lenders.

Sierra Finance has access to 50+ lenders across secured, unsecured, and specialist tax debt facilities. We know which lenders are active in this space right now, what they will approve, and how to structure the file to get the best terms. One conversation, one application, access to the full market.

We also handle the paperwork, liaise with the lender, and coordinate the ATO payout on settlement. You tell us what you owe and we take it from there.

Get a Free Tax Debt Finance Quote

Talk to Sierra Finance about clearing your ATO debt. Access to 50+ lenders, no obligation, and a structure matched to your situation.

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Getting Tax Debt Finance

Step 1: Tell Us What You Owe

Call or enquire online with the details of your ATO debt, including the type of tax, the amount, and whether you are on an existing payment plan. We will ask about your business trading history and any security you may have available. This initial conversation takes ten minutes.

Step 2: We Match You to the Right Lender

Based on your situation, we identify the lender and structure that fits. We prepare and submit your application with everything the lender needs to assess it. For straightforward unsecured files, approval can come through within 24 to 48 hours.

Step 3: ATO Gets Paid, You Move On

On settlement, the lender pays the ATO directly and your tax debt is cleared. You repay the lender on agreed terms with predictable instalments. No more compounding ATO interest, no more chasing deadlines, and no more risk to your credit file.

Frequently Asked Questions

Can I Get Finance to Pay Off ATO Tax Debt? +

Yes. Multiple lenders specifically offer finance for clearing ATO obligations, including income tax, BAS, GST, PAYG, and superannuation debts. Sierra Finance works with 50+ lenders across this space, matching you with the right option based on your debt size, business profile, and available security.

Is the Interest on ATO Payment Plans Still Tax Deductible? +

No. From 1 July 2025, the General Interest Charge that the ATO applies to payment plans is no longer deductible for tax purposes. This means the effective cost of staying on an ATO arrangement is significantly higher than it was previously. Most commercial finance alternatives still offer fully deductible interest, which is one of the main reasons businesses are refinancing out of ATO plans.

What Types of Tax Debt Can Be Financed? +

Most types of ATO debt can be financed, including income tax, BAS obligations (GST and PAYG), superannuation guarantee charge, company tax, capital gains tax, and penalties or interest that have accrued on unpaid balances. Lenders can also fund the payout of existing ATO payment plans.

How Quickly Can Tax Debt Finance Be Approved? +

For unsecured business loans under $250,000, approval can come through within 24 to 48 hours with funding shortly after. Some lenders offer same day conditional approval. Secured facilities or larger amounts may take one to three weeks depending on valuation and documentation requirements.

Can I Get Tax Debt Finance with Bad Credit or ATO Defaults? +

Yes. Several lenders on our panel will consider applications from businesses with ATO defaults on their credit file, as long as the business is currently trading and can demonstrate capacity to service the new facility. Rates may be higher, but options exist. The key is matching the file with a lender whose credit appetite fits the situation, which is exactly what a broker does.

What Is the Difference Between an ATO Payment Plan and Tax Debt Finance? +

An ATO payment plan is an arrangement directly with the tax office to pay your debt in instalments, with interest compounding daily at the General Interest Charge rate. Tax debt finance is a commercial loan or facility from a private lender that pays the ATO in full on settlement, replacing the tax debt with structured repayments at a potentially lower cost with deductible interest. The commercial option typically offers more flexibility on terms and repayment structure.

Do I Need Security to Get Tax Debt Finance? +

Not necessarily. Unsecured business loans are available for tax debts typically up to $250,000, assessed primarily on your business turnover and cash flow. For larger debts or where the business wants longer terms and lower costs, security such as equipment, vehicles, or property can be used. A personal guarantee from the directors is standard for most business lending.

Will Applying for Tax Debt Finance Affect My Credit Score? +

A formal credit enquiry is part of any finance application and will appear on your credit file. However, a single enquiry from a well matched application has minimal impact. The greater risk to your credit score is leaving ATO debt unresolved. The ATO can and does report tax debts over $100,000 that remain outstanding for more than 90 days directly to credit bureaus.

Can I Consolidate My Tax Debt with Other Business Debts? +

Yes. Many businesses combine their tax debt with other outstanding obligations such as supplier debts, existing loan balances, or working capital needs into a single facility. Consolidation simplifies repayments and can reduce the total monthly outgoing by spreading the balance over a longer term.

What Happens If I Do Nothing About My ATO Tax Debt? +

The ATO applies interest daily on unpaid tax debt, and the balance compounds. Beyond the financial cost, the ATO can report the debt to credit bureaus, issue garnishee notices against your bank accounts, issue Director Penalty Notices making directors personally liable, and ultimately commence wind up proceedings. Early action gives you the most options and the best outcomes.

Is It Better to Use a Broker or Go Direct to a Lender for Tax Debt Finance? +

A broker gives you access to the full market in a single application. Every lender has different criteria for tax debt files, and approaching the wrong one wastes time and adds unnecessary enquiries to your credit file. A broker identifies the right fit first, handles the application, and negotiates terms. There is no cost to the borrower for using a broker as commissions are paid by the lender.

Can a New Business Get Tax Debt Finance? +

Options are more limited for businesses under two years old, but not nonexistent. If you have assets such as equipment, vehicles, or property that can be used as security, secured finance is available. Some lenders will also consider newer businesses with strong bank statement data even without full financial statements.

How Much Can I Borrow for Tax Debt Finance? +

Tax debt finance typically ranges from $20,000 to over $1 million, depending on the structure and security available. Unsecured facilities generally cap around $250,000 to $500,000, while secured facilities against property or equipment can fund larger amounts. The lender will assess the amount against your capacity to repay.

Can I Finance Superannuation Guarantee Charge Debts? +

Yes. SGC debts are one of the most urgent types of tax debt because they carry personal liability for directors through the Director Penalty Notice regime. Financing the SGC debt clears the obligation and removes the personal exposure. Lenders familiar with this space understand the urgency and can move quickly.

Will the ATO Know I Am Applying for Tax Debt Finance? +

No. Applying for finance is a private matter between you and the lender. The ATO only becomes involved at the point of settlement when the lender pays out your tax debt directly. At that point, the ATO receives full payment and your obligation is cleared. There is no adverse consequence to seeking finance to resolve a tax debt.

Ready to Clear Your Tax Debt?

Call Sierra Finance on 0416 960 969 or fill out the form below. We respond same business day with your options and next steps.