Received a director penalty notice? You have 21 days. Here is how to fund it.

What a director penalty notice means for you

A director penalty notice, or DPN, is the ATO telling a company director that they can be held personally liable for certain unpaid company tax debts, typically PAYG withholding, GST and superannuation guarantee charge. The notice gives you 21 days from the date it was issued to act. Once that window passes, your options narrow sharply.

The most important thing to know is that the clock starts from the date on the notice, not the date you opened the envelope. If the notice sat in a pile or went to an old address, some of those 21 days may already be gone. That is why speed matters more here than almost anywhere else in business finance.

Paying the debt in full within the 21 days is one of the ways a director penalty can be dealt with, and it is often the option that lets the business keep trading as normal. Some notices, particularly where lodgements were made late, can only be resolved by payment. Your accountant or adviser will tell you which type you have; our job is to help fund the payment if that is the path you choose.

Why a bank cannot help in 21 days

A bank refinance commonly takes up to three months or more. It will ask for years of financials, check your credit history, order a valuation, and then may not approve the amount you need. With a DPN, three months is not an option. Neither is a slow cash flow lender who declines as soon as they see the ATO debt on your statements.

Equity Tap lends from $50k to $5m for one to twelve months, secured by a first mortgage, second mortgage or caveat over residential or commercial property anywhere in Australia. We don't order a valuation before approval, and we don't need tax returns, BAS, profit and loss, an accountant's letter or bank statements for a property-secured loan. ATO debt is the reason you are calling; it is not a reason for us to say no.

A realistic 21-day plan

Here is how a DPN funding loan typically runs. Timing always depends on the scenario and the property, but this shows why calling early matters.

1. Day 1: call 1300 123 024 or apply online. Tell us the amount on the notice, the date it was issued, the property you can offer and how you plan to repay.
2. Same day: conditional approval can often be given on the phone, and a term sheet issued in about 30 minutes once we have the scenario.
3. Next few days: you sign, we prepare the loan documents and gather ID, property details and existing mortgage information. No valuer visit to wait for.
4. Settlement: eligible loans can settle in as little as 24 hours once documents are back. Funds go to pay the ATO.
5. Buffer: the remaining days give room for the first mortgagee's consent if we are lending on a second mortgage, or for any other step your adviser needs.

The tighter the timeline, the more it helps to have the ATO notice, your ID and the property details ready when you call.

Leaving your home loan where it is

Many directors offer their home as security because that is where the equity is. You don't need to refinance your existing home loan to do this. A second mortgage business loan sits behind the first mortgage, which stays exactly where it is (the first lender's consent may be needed). Where speed is critical, a caveat loan can be the fastest route. If you want to see how much equity you have to work with, try the equity calculator.

Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments while you get the business back on an even footing. Interest is not waived, but it doesn't come out of a cash flow that is already under strain.

How the loan is repaid

We lend short term because you only need the money for as long as it takes to fix the problem. Typical exits for DPN loans include a bank refinance once the tax debt is cleared and lodgements are current, collection of debtors, sale of equipment, stock or a property, or trading cash flow over the following months. We agree the exit with you before funding, and we make sure you understand the loan, the costs and how you will get out of it.

What we need

• ID for each director and guarantor.
• A copy of the director penalty notice and the ATO account statement.
• Property address and existing mortgage details.
• Evidence of the exit.

No credit check at initial assessment. Past defaults, other ATO debt or a recent decline are not automatically a problem.

Related pressure points

A DPN rarely arrives alone. If the company also has a statutory demand, falling-behind payroll and super or GST and BAS arrears, we can often look at the whole picture in one loan. Our ATO tax debt loan page and the ATO tax debt guide cover the broader options.

Brokers: DPN clients need an answer today

If a client walks in with a DPN, send it through our broker page straight away. You deal with the decision maker, get a fast indicative answer, and keep the client for the refinance once the dust settles.

Don't let the days run out

Each loan is priced on the client's individual circumstances, aiming for the sharpest rate available for that situation, with the full cost shown before you proceed. Call 1300 123 024 or start your application now.

Business-purpose lending only. Approval, timing and terms depend on the scenario.

Frequently asked questions

Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.