Tax debt help for business owners: every option, side by side

Owing the ATO more than the business can pay is lonely, but it’s far from rare. In February 2026 the ABC reported that calls to the Small Business Debt Helpline rose 21% in 2025, and that ATO debt featured in close to two-thirds of the helpline’s cases. If that’s where you are, this page lays out every realistic option in one place, what each one costs you in time and stress, and where a short-term property loan genuinely fits. It also covers where it doesn’t.

What help is available if your business can’t pay its tax debt?

There are five roads out. Most owners end up using one or two of them together.

Option	How it works	Best suited to	The catch
Pay in full	Clear the balance from cash or savings	Small debts, healthy cash reserves	Can drain working capital you need next month
ATO payment plan	Instalments agreed with the ATO, online for debts of $200,000 or less	Debts you can clear within a year or two from trading	Interest keeps compounding daily, and a missed obligation can default the plan
Loan	Borrow and pay the ATO in one hit, secured by property or unsecured	Larger debts, or when ATO action is already under way	It has to be repaid, so you need a clear exit
Sell an asset	Sell equipment, a vehicle, shares or a property	Owners with idle assets	Fire-sale pricing if you’re rushed
Restructuring advice	An accountant or registered adviser reviews the whole business	Businesses losing money every month	Formal processes have lasting consequences

None of these is the “right” answer for everyone. The useful question is whether your business has a timing problem (the money is coming, just not before the ATO wants it) or a viability problem (the business spends more than it earns). Timing problems can usually be funded. Viability problems need advice first.

Should you call the ATO first?

Yes, or ask your tax agent to call for you. The ATO’s advice is to contact it or your registered tax professional “as early as possible”. Since late 2024 it has said its firmer action is aimed at businesses that refuse to engage and keep ignoring its SMS and letter reminders.

That first call does three things. You find out the exact balance, including interest. You learn whether a plan is available on terms you can meet. And you’re on record as engaging, which matters for several of the ATO’s tougher steps.

Before you ring, have these ready:

• your lodgement position, because overdue BAS or returns are the first thing raised;
• a realistic monthly amount you could pay;
• any event coming up that would clear the debt, such as a property sale, a refinance or a large receivable.

If the debt is over $200,000, the ATO asks for more detail before agreeing to a plan. That includes your bank balances, lines of credit, income, expenses and assets.

When does a loan make more sense than a payment plan?

A plan is often the cheaper path when the debt is modest and the instalments fit easily inside your cash flow. A loan tends to win when:

• the plan would run for years, with interest compounding the whole way (and since 1 July 2025 that interest is no longer tax deductible);
• the ATO won’t agree to terms you can afford;
• firmer action has already started, such as a garnishee, a director penalty notice or a warning about credit reporting;
• a bank refinance or a sale is coming that would repay a short loan within months.

We compare the two in detail, with a worked example, on ATO payment plan vs business loan.

What happens if you ignore an ATO debt?

The pressure escalates, and each step is harder to undo than the last. The ATO lists these among the firmer actions it may take:

• Garnishee notices to your bank, customers who owe you money, or the solicitor or agent handling a property sale. See what to do about an ATO garnishee notice.
• Director penalty notices, which can make directors personally liable for unpaid PAYG withholding, GST and super guarantee charge. See director penalty notice loans.
• Disclosure to credit reporting bureaus, which can follow when $100,000 or more is overdue for more than 90 days. See ATO debt and your credit file.
• Legal action, freezing orders, security requirements and departure prohibition orders in serious cases.

If a deadline is already running, our urgent tax debt loan page sets out what to gather so funding can happen within days.

Can you use property to clear a tax debt quickly?

Often, yes. This is the part of the market we work in every day. A business loan for tax debt, secured by property, can pay the ATO in full, stop the interest meter and remove the trigger for firmer action. You then repay the loan from a sale, a refinance once your tax account is clean, or a known receipt.

How we secure it depends on where the property is:

• Victorian property with a bank mortgage: a caveat loan behind your existing lender.
• Property in any other state or territory: a short-term registered second mortgage, usually arranged just as quickly.
• Property owned outright: a short-term first mortgage.

We lend from $20k to $5m, ATO debt is considered case by case, and funding of $20k to $250k is possible the same day when the title and paperwork line up. For the full breakdown of structures, see ATO debt loans. If the security is your own home, read using home equity to pay an ATO debt.

If you’d like a straight answer on whether your equity can cover the debt, send us the ATO balance and the property details.

An illustrative example. Round numbers, no real client. A plumbing business owes the ATO $140,000 after a builder it worked for paid months late. The owners have a rental property in Ballarat worth about $650k, with $300k owing, and a large retention and final payment from a hospital job is due in about five months. A two-year plan would leave the debt compounding the whole time. Instead, a caveat loan over the Victorian rental pays the ATO in full within the week, and the loan is repaid when that payment lands.

Before you consider an insolvency firm, it’s worth asking whether equity you already own could fund your way through. For many owners with a sound business and a short-term hole, that keeps the company, the staff and the director’s name intact.

Who else can help: accountant, adviser, helpline?

• Your accountant or registered tax agent. They can negotiate with the ATO, bring lodgements up to date and advise on the tax effect of any finance. The ATO suggests discussing third-party finance with them.
• The Small Business Debt Helpline (1800 413 828). Free, confidential financial counsellors who can help negotiate payment arrangements and request penalty and interest remission.
• The Australian Small Business and Family Enterprise Ombudsman. Its handling debts page links to free mentoring, mental health coaching and dispute support.
• A lender that understands tax debt. That’s us, when there’s property behind the business and a believable way to repay.

Tax debt is a problem we solve all the time — see if you qualify

You don’t need to have everything worked out before you talk to us. The enquiry takes about 60 seconds, and there’s no credit check when you first enquire. Your details stay with our team instead of being passed around to a list of lenders, and a real person reads your situation and calls you.

Please answer the form accurately, especially the property address, which state it’s in, the ATO balance and any date on a notice. That way the first conversation is about real options, not guesswork.

Find out if your equity can clear the ATO →