Quick answer
A BAS and GST debt loan is finance used to pay or refinance a business activity statement balance owed to the ATO, including GST, PAYG withholding and related interest. Ownright Custom Finance arranges these loans Australia-wide, using property, business assets or trading strength to replace a tax debt with a structure you can manage.
Key points
- GST, PAYG withholding and BAS balances can be refinanced
- Property or business assets often support the loan
- One lender repayment can replace an ATO balance that keeps growing
- Directors face personal exposure for some unpaid tax, so timing matters
- Suits
- Businesses behind on BAS, GST or PAYG withholding
- Common uses
- Clearing ATO debt, ending a payment plan, ending garnishee threats
- Security
- Often property; sometimes business assets
- Australia-wide
- Yes
What is a BAS and GST debt loan?
A BAS and GST debt loan is borrowing used to settle what a business owes the ATO from its business activity statements. That balance might include GST collected but not paid, PAYG withholding, PAYG instalments and the interest that builds on top. The loan pays the ATO in full or in part, and the business then repays the lender instead.
The product itself is not unusual. It is simply a refinance or short-term loan whose purpose is tax debt. What makes it tricky is that many mainstream lenders turn away anyone with an ATO balance. Ownright Custom Finance works with lenders who are comfortable with that profile, including private lenders, and arranges these loans in every state and territory.
Why do BAS debts happen?
Most tax debts start with a good business having a tough stretch:
- A big client pays late and the GST is already due
- Cash is used for wages and suppliers, and BAS gets pushed back
- Fast growth outpaces the cash set aside for tax
- A seasonal slump follows a busy quarter
- An accountant or bookkeeper change causes lodgement delays
- A one-off event such as a flood, a break-in or an illness hits trading
None of this makes you a bad operator. It makes you a person who needs a plan, and sooner is better, because the ATO charges general interest charge on overdue amounts and can escalate collection.
What happens if a BAS balance is left unpaid?
The ATO can offer payment plans, but it can also take stronger steps for ongoing non-payment, including garnishee notices on bank accounts or debtors and, for companies, director penalty notices. The ATO explains that directors can be personally liable for unpaid PAYG withholding, GST and super, and that a notice gives 21 days to remedy the position. Options differ depending on whether the amounts were reported on time, and for late or unreported amounts the only option can be to pay the company’s liability in full. This is general information only, so check the ATO page and speak with an accountant or insolvency adviser about your own position.
Who is a BAS debt loan for?
- Sole traders and partnerships with an overdue BAS balance
- Companies owing GST or PAYG withholding
- Owners on a payment plan that is hard to meet
- Directors worried about director penalty exposure
- Businesses with a garnishee or default notice
- Owners who also have a home or investment property and want to avoid worse outcomes
What do lenders look at?
| Factor | What the lender wants to see |
|---|---|
| ATO account | A current account statement with the exact balance |
| Security | Property, or business assets with enough value |
| Trading | Bank statements showing the business is still earning |
| Exit plan | How the loan will be repaid, e.g. refinance later |
| Paperwork | BAS lodged up to date; accountant’s confirmation if needed |
| Credit file | Honesty about defaults or past arrears |
If you do not have the ATO figures, our guide to getting an ATO account statement shows where to look. The guide on BAS and financial statements covers the rest.
How does Ownright approach tax debt?
Ownright is about solutions. Trevor Scott has spent more than 40 years in finance and has worked with owners across the country who thought the ATO balance meant the end of borrowing. Often it does not. Property equity can be used through a second mortgage for tax debt, a full ATO debt refinance or a broader business loan to clear ATO debt. Some lenders prefer a secured route, while others will look at unsecured amounts. Each has costs and risks, and we talk them through plainly.
Where the business is sound but the cash flow is cramped, we may also look at cash flow loans alongside the tax payout. Speed can be possible, but it depends on the lender, the security and how quickly documents arrive.
What does an illustrative scenario look like?
This is illustrative only. A landscaping company falls behind on three quarters of BAS after two clients pay late. The ATO has put them on a payment plan, but the instalments squeeze wages. The owners have a home with equity. We would collect the ATO statement, review the plan, and consider a lender willing to take a second mortgage to pay the balance. The monthly repayment may be lower or higher than the plan, depending on the terms and the length. The lender decides, and approval is never assured, but a single payout often removes the daily pressure.
What mistakes should you avoid?
- Ignoring ATO letters in the hope the debt goes away
- Using personal credit cards to pay GST, which can create a second problem
- Paying wages and skipping PAYG without a plan
- Taking the first offer without comparing structure and exit
- Leaving it until a garnishee lands
- Applying with several lenders and creating credit enquiries
The guide on ATO debt and your property explains the property side, and home loans when you owe the ATO covers owners looking at their personal mortgage.
What documents should you have ready?
- ATO account statement for the business
- Recent BAS lodgements and any payment plan details
- Twelve months of bank statements
- Last two years of tax returns
- Property details if security is offered: title, rates notice
- Any ATO correspondence such as default or garnishee notices
- ID for all directors and guarantors
What should you ask before refinancing tax debt?
Clearing a BAS balance with a loan changes who you owe, so it is worth asking a few plain questions first. How long will the repayments run, and what happens if the business has a quiet month? Is the security a home, and what would that mean for the family if things went wrong? Does the loan cover only the ATO balance, or also the costs of arranging it? Is there an early payout option once the business is back on its feet?
It also helps to talk to your accountant about the cause. If GST is being spent as it comes in, the same debt can build again, even after a payout. A simple habit such as moving a fixed share of each sale into a separate account can protect the next BAS. We are happy to work alongside your accountant, and we will tell you straight if a payment plan with the ATO looks like the better fit for your circumstances.
Behind on BAS and want it sorted?
Sounds like you are looking for a BAS or GST debt loan. We are the lending experts when the ATO balance is the roadblock, so see if you qualify with the button below and we will map the next step.
How it works, step by step
- 1
Step 1
Get your ATO account statement and tell us the balance and any payment plan.
- 2
Step 2
We assess the security, the cash flow and the quickest sensible route.
- 3
Step 3
We approach lenders comfortable with tax debt, including private options.
- 4
Step 4
Funds are paid to the ATO and you move to one clear repayment.
Frequently asked questions
Can I get a loan to pay a BAS or GST debt?
Yes, in many cases. Lenders can refinance an ATO balance if there is suitable security or strong trading. The loan pays the ATO and replaces the debt with a regular repayment. Terms depend on the lender and your situation. Get your ATO account statement ready so we can see exactly what is owed.
Is it better to use an ATO payment plan or a loan?
It depends. An ATO payment plan can be flexible, but general interest charge keeps accruing and a missed payment can cause trouble. A loan may give a clearer end date and remove ATO contact. We compare both paths with your accountant's view in mind.
Can I get a BAS debt loan with bad credit?
Sometimes. Tax debt often goes with a patchy file, and private lenders in particular focus on the security and exit plan rather than only the credit history. Expect different terms and perhaps a smaller loan-to-value. We explain what to expect before you apply.
What are director penalty notices and do they matter?
The ATO can make directors personally liable for a company's unpaid PAYG withholding, GST and super. A notice gives 21 days to act, and options differ depending on whether the amounts were reported on time. Seek professional advice quickly, and tell us the timing so we can look at funding.
Can I borrow if the ATO has issued a garnishee or default notice?
Sometimes, but time is short. Lenders can usually move faster when you have a clear payout figure and security ready. Speed depends on the lender, the security and how quickly documents arrive. Ring us on 03 7043 7233 with the notice details.
Will a loan stop future BAS problems?
A loan clears the old balance but does not fix the cause. Setting aside GST and PAYG as you trade, lodging on time and having an accountant check your cash flow all help. We encourage owners to fix the process at the same time as the funding.