For many business owners, tax debt can quietly accumulate during periods of tight cash flow or rapid growth. The ATO is becoming increasingly firm in its collection approach, and while payment plans are an option, they are not always the most cost-effective or strategic path forward.

At Simplify Finance, we often speak with business owners who are unaware that tax debts can be financed — and that doing so can improve cash flow, protect business credit ratings, and avoid compounding ATO penalties.

Understanding the True Cost of ATO Tax Debt

While the ATO does offer payment plans, it also charges a General Interest Charge (GIC) on outstanding balances. As of the current financial year, the GIC is 11.34% p.a., compounded daily. That is significantly higher than the interest rates available through business loan facilities or short-term tax debt funding.

Many business owners are surprised to learn that they are effectively paying credit card-level interest on tax debts — without the flexibility or control.

Financing Tax Debt: What Are the Options?

Financing a tax debt is not about avoiding your obligations — it is about managing them better.

There are several options available, including:

  • Unsecured business loans
  • Short-term private lending
  • Cashflow lending facilities
  • Secured lines of credit (where available)

Interest rates on these facilities typically range from 8% to 12%, with flexible repayment terms and faster approval than traditional bank lending. Some lenders will even consider tax debt facilities if you have an ATO payment plan in place — without requiring real estate security.

Why Consider Financing Your Tax Debt?

  • Lower overall cost than the ATO’s interest rates
  • Preserve your business credit file by avoiding defaults or director penalties
  • Access working capital without disrupting day-to-day operations
  • Maintain goodwill with the ATO while reducing financial stress

In many cases, clients who restructure their tax debt using third-party funding are able to get on the front foot with business planning, staff retention, and future tax compliance.

When Should You Act?

If you are behind on BAS, PAYG, or income tax, or if the ATO has issued a warning letter, it is critical to act early. The longer the debt remains, the more pressure is applied — including potential garnishee notices, director penalty notices, or restrictions on future ATO arrangements.

We Can Help

At Simplify Finance, we work with a panel of lenders who understand the pressures of business and can assess funding options for tax debt quickly and discreetly. Our role is not just to secure finance — but to help you make informed decisions that support the long-term success of your business.

If you are managing tax debt and want to explore your options, reach out for a confidential discussion today.