How GST and BAS arrears build up
GST is collected from customers as you trade, but it isn't due to the ATO until the BAS. In between, that money sits in the operating account and gets used for wages, stock, rent and suppliers. In a good quarter, the cash is there when the BAS is due. In a tight quarter, it isn't, and one missed BAS becomes two.
BAS debt also tends to bundle several things together: GST, PAYG withholding, PAYG instalments and sometimes fuel tax credits adjustments. Each quarter it sits unpaid, general interest charge is added. The ATO may offer a payment plan, but plans are hard to keep up when the same cash flow that caused the problem now has to fund an extra monthly instalment on top of the current BAS.
Signs it is time to act
- You have two or more BAS periods outstanding.
- A payment plan has defaulted or been cancelled.
- Your bank or a lender has declined you because of the tax debt.
- Suppliers have tightened terms after seeing ATO debt on your credit file.
- You've received warning letters about garnishee notices, a director penalty notice or a statutory demand.
Why the bank says no
To a bank, BAS arrears are a sign of trouble. It will want your lodged BAS and financials, check your credit, and either decline or take up to three months or more to say yes. Cash flow lenders read the same bank statements and often reach the same answer.
Equity Tap looks at it from the other side. We are a direct, independent private business lender lending our own money from $50k to $5m for one to twelve months, secured by property. For a property-secured loan we don't need your BAS, tax returns, profit and loss, an accountant's letter or bank statements. ATO debt and past declines are not automatically a problem, and there is no credit check at initial assessment.
Payment plan or short-term loan?
| ATO payment plan | Equity Tap secured loan | |
|---|---|---|
| Debt with the ATO | Stays on the ATO account | Paid out in full |
| Monthly cash outlay | Plan instalments plus current BAS | No scheduled payments if interest is prepaid or added for up to six months |
| Risk if a payment is missed | Plan can default and collection resumes | Agreed exit with a fixed end date |
| Effect on refinancing | Outstanding ATO debt visible to banks | Debt cleared, making a later refinance easier |
Which is better depends on your numbers. Your accountant is the right person to weigh that up, and we are happy to talk it through with them. What we see most often is that clearing the debt in one hit gives the business a clean start: the current BAS can be paid on time from trading, and there is no old balance quietly collecting interest in the background.
Security and structure
We lend against residential or commercial property anywhere in Australia on a first mortgage, second mortgage or caveat. Most clients use a second mortgage so the existing home loan or commercial loan stays put, with the first lender's consent if needed. We don't order a valuation before approval, so there's no valuer to wait on and no time away from the business meeting one at the property. See no valuation business loans for how that works.
How the loan is repaid
The exit needs to be real and agreed before funding. For BAS arrears, typical exits are:
- A bank refinance once the tax debt is cleared and lodgements are current, which often makes a bank far more receptive.
- Trading cash flow through a stronger season.
- Collecting a large receivable or contract payment.
- Selling surplus equipment, stock or a property.
Read our exit strategy guide to plan it out.
From call to cleared BAS debt
Call 1300 123 024 with the amount owed, the property and the exit. The person you speak to is often the person who decides. Conditional approval can often be given on the phone, and a term sheet issued in about 30 minutes once we have the scenario. You'll need ID, property and existing mortgage details, an ATO account statement and evidence of the exit. Eligible loans can settle in as little as 24 hours.
If the BAS debt sits alongside other tax problems, our ATO tax debt loan page and ATO tax debt guide cover the bigger picture. If wages and super are also under pressure, see payroll and super funding.
Brokers
A client declined over BAS arrears isn't a dead lead. Send it through our broker page for a fast indicative answer, and line up the bank refinance once the debt is gone.
Clear it and move on
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. Apply now or call 1300 123 024.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
Can I borrow to pay GST I owe the ATO?
Do you need to see my BAS?
Is a loan better than an ATO payment plan?
Will ATO debt on my credit file stop the loan?
How fast can you pay the ATO?
Do you need a valuation?
What is the smallest amount you lend?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.