The lending barrier
The business was still operating, but $85,000 in ATO debt was absorbing cash flow and collection action was disrupting day-to-day work. The electrician’s initial refinance enquiry had reached a dead end. Behind the debt was a company income position that needed explaining, overdue BAS records and a home loan that had to be considered alongside the proposed tax payout.
How we approached it
The first task was to make the application assessable. We worked through the company records, the reason the tax debt had accumulated and the current cash flow, with the accountant bringing the supporting information up to date. We then matched the proposal to a lender prepared to consider tax-debt consolidation. The funding plan covered the ATO payout, existing mortgage and transaction costs, with a repayment strategy for the additional borrowing. Any interim ATO arrangement and collection notices needed to be coordinated through the payout process.
The outcome
The intended result was a cleared tax balance and a repayment arrangement the business owner could manage alongside the home loan. That would give the electrician room to focus on running the business, with the tax debt addressed through a defined funding plan.
What this means for borrowers
The value of the refinance was the coordinated solution: acceptable income evidence, a lender willing to consider the tax debt and a practical repayment plan. We compare total costs as well as monthly cash flow, because spreading a tax debt over a longer term can increase interest and places that debt against the home.
Questions about this case
What makes an ATO debt refinance more complex?
The lender needs to assess the underlying business, tax position, accepted income, equity and repayment plan together. Up-to-date records and an explanation of how the debt arose help present the application.
This is an illustrative scenario comparable to deals we have handled for our clients. Figures and outcomes are examples; lending remains subject to individual assessment.