Why Financing Your ATO Debt Could Save Your Business Money

The Australian Tax Office charges interest on overdue amounts at a rate that’s often higher than what you’d pay with a business loan. This means the longer you delay, the more you pay. 

Here’s why financing your ATO debt makes sense: 

1. Lower Interest Rates - Most business loans offer significantly lower interest rates compared to the ATO’s General Interest Charge (GIC). By refinancing your tax debt, you can reduce the cost of borrowing and free up cash for other priorities.  
2. Tax-Deductible Interest - Unlike ATO interest charges, the interest on a business loan is generally tax-deductible. This creates an additional saving that helps improve your bottom line.  
3. Improved Cash Flow - Financing allows you to spread repayments over a manageable term rather than paying a lump sum. This keeps your working capital intact and ensures you can continue to invest in growth.  
4. Avoid Penalties and Stress - Clearing your ATO debt quickly means avoiding escalating penalties and the stress of compliance issues. It also protects your credit profile and business reputation.  

The Bottom Line: 

Financing your ATO debt isn’t just about paying what you owe—it’s about doing it smarter. By reducing interest costs, improving cash flow, and leveraging tax benefits, you can turn a financial challenge into a strategic advantage, helping to set yourself up for success in 2026. 

Need help organising finance for your ATO debt? 

Loans and Finance by TaxAssist can help you find the right solution. 

Arrange a meeting with one of our Loan specialists and take control of your cash flow by calling 02 9608 3707 or visiting our website..