Short answer: Yes. You can get a business loan with an ATO debt, and many businesses use one to clear it. Property-secured loans consider ATO debt and don't need financials, while cash-flow loans focus on current trading. Since 1 July 2025, ATO interest charges (GIC) are no longer tax-deductible, which makes refinancing tax debt worth comparing.
Why ATO debt is more expensive from July 2025
From 1 July 2025, the general interest charge (GIC) and shortfall interest charge (SIC) are no longer tax-deductible. Interest on overdue tax now comes entirely from after-tax profit. For many businesses, a short-term loan to clear the debt now compares favourably. Your accountant can run the numbers.
Loan vs ATO payment plan
| ATO payment plan | Business loan | |
|---|---|---|
| Interest | GIC, not deductible | Loan interest, generally deductible for business purpose |
| Enforcement risk | Remains if you default on the plan | ATO debt cleared |
| Credit reporting | Business tax debt can be reported | Debt cleared from ATO |
| Speed | Depends on ATO approval | 2 hours to 24 hours |
General comparison only. Speak to your accountant about your situation.
Which loan suits ATO debt?
- Property owners: caveat or second mortgage. No financials, overdue lodgements considered, up to $5M.
- No property: a cash-flow loan for smaller debts if your account shows steady trading.
Act early
If you've received a garnishee notice or director penalty notice, call us on 1300 863 711 straight away. Timing matters.
