Refinancing an ATO tax debt with a business loan

Last updated 6 November 2026 · Reviewed by 360 Asset Finance Compliance

Can I refinance my ATO debt with a business loan?

Possibly. Some lenders will consider a business loan where the purpose is to pay a tax debt, such as overdue BAS or income tax owed by the business. 360 Asset Finance can arrange this through its lender panel, subject to the lender's criteria. Depending on the lender and the business, it may be an unsecured business loan or a loan secured by business assets.

The lender will assess your application against its criteria, and not every business or tax debt will fit. A loan only changes who the business owes: it doesn't reduce the debt, so the business still needs a plan to repay it and to keep up with tax as it falls due.

What does the ATO offer if my business can't pay on time?

The ATO has several support options for businesses that can't pay on time, set out on its help with paying page. The main one is a payment plan:

• A payment plan lets the business pay what it owes in instalments.
• The ATO decides whether the business is eligible and on what terms.
• The general interest charge generally keeps building on debts under a payment plan, so paying sooner generally means paying less interest.
• Future tax and super obligations still need to be paid in full and on time.
• Income tax and activity statement debts may need separate payment plans.

Your accountant or tax agent can talk to the ATO with you about the options.

ATO payment plan or refinancing with a business loan: how do they compare?

A general summary only. Neither route suits every business: compare the total cost and the repayments with your accountant.

Why should I talk to my accountant first?

Your accountant or tax agent knows your business's tax position and cash flow. They can help you:

• confirm what's owed and that lodgements are up to date;
• work out what repayments the business can manage, alongside future tax;
• compare the cost of a payment plan with the cost of a loan;
• understand how interest and charges are treated for tax.

Pros and cons

Possible pros of refinancing with a business loan:

• The loan pays what's owed to the ATO, and the business then repays one lender on agreed terms.
• Repayments are set out in the loan agreement, which can help with planning.
• It may suit a business that can't get a payment plan on terms it can manage.

Possible cons:

• Loan interest and fees can add to the total cost.
• The lender may ask for security or for a director to act as guarantor.
• The debt doesn't go away: it moves from the ATO to the lender.
• It doesn't fix an underlying cash flow problem, and future tax still has to be paid on time.

An ATO payment plan has its own trade-offs, including the general interest charge and the ATO's conditions. Your accountant can help you weigh up both.

How do I refinance a tax debt, step by step?

1. Talk to your accountant or tax agent to confirm what's owed and that lodgements are up to date.
2. Look at the ATO's help with paying options, including a payment plan.
3. If you want to compare a loan, tell your broker about the business, the debt and your cash flow.
4. Your broker compares options across the panel and prepares the application. The lender will assess your application against its criteria.
5. If it's approved, the loan is used to pay the ATO, and the business repays the lender under the loan agreement while keeping up with future tax.

How can 360 Asset Finance help?

We're a specialist finance broker working with a panel of lenders. If you're looking at refinancing a tax debt, we can:

• find out whether a lender on our panel may consider refinancing the debt, subject to its criteria;
• compare options across the panel, with the repayments and total cost side by side;
• tell you what the lender needs, which often includes details of the tax debt, recent business financials and bank statements;
• work with your accountant, so the loan is weighed against an ATO payment plan;
• prepare the application and keep you updated through to settlement;
• talk through next steps, including other working capital options.

FAQs

Sources and further reading:ATO: Help with paying · ATO: Payment plans · business.gov.au: Financial trouble

General information only. It doesn't take into account your objectives, financial situation or needs, and it isn't credit, tax or legal advice. Finance is provided by the lender you choose and is subject to its lending criteria; fees and charges apply. 360 Asset Finance is a trading name of Kuone Consulting Pty Ltd (ABN 75 647 329 002), Australian Credit Licence 566705.