One repayment can be simpler. It still needs to be affordable.
When ATO instalments, equipment finance and short-term loans all fall due together, it can be hard to see what the business can actually afford. Consolidation finance may combine eligible debts into one new facility.
The aim is a manageable repayment structure, not simply a bigger loan. Some existing debts may have payout costs or favourable terms that are worth keeping. Consolidating unsecured debts against property can also put that property at risk.
Build the full debt picture first
Bring payout statements, your ATO balance, existing loan contracts and recent business financials. Compare the new total cost against each current facility.
- Include discharge fees and early repayment charges.
- Identify which debts are business debts and which are personal.
- Check any security or guarantees required by the new lender.
- Keep a realistic provision for future tax bills.
Who debt consolidation tends to suit
Consolidation can suit a business juggling several repayment obligations — an ATO instalment, equipment finance and perhaps a short-term loan — where simplifying into one facility would make cash flow easier to manage and forecast. If the combined new repayment is clearly more affordable than the sum of the current ones, it is worth investigating properly rather than guessing at the saving.
It is less suitable where some existing facilities have favourable terms you would lose by refinancing, or where consolidating unsecured debts against property would put a home or other asset at risk you are not comfortable accepting. It also will not help if the underlying issue is that the business cannot generate enough income to service any level of debt — that is a conversation for your accountant first, and possibly an insolvency practitioner if viability is genuinely in question.
Comparing the full cost of consolidating
Consolidation is not automatically cheaper. Add up the total remaining cost of each existing facility, including any discharge or early repayment fees, and compare that to the new consolidated facility’s total repayable amount over its full term. Check our [rates and fees](/rates-and-fees) page for the cost components to look for, and use our [ATO GIC calculator](/ato-gic-calculator) if an ATO balance is part of the mix.
Remember that GIC is no longer tax-deductible from 1 July 2025, which can change the comparison versus leaving part of the debt with the ATO, particularly for businesses that previously relied on that deduction to offset the ongoing charge.
What lenders look at and documents to prepare
A consolidation lender will typically want visibility of every debt being combined, your ATO position, and evidence that the new single repayment is sustainable alongside normal trading costs and any seasonal variation in income.
- Payout statements for each facility being consolidated.
- Your current ATO statement and any payment plan details.
- Recent business bank statements and financial information.
- A breakdown of which debts are business debts and which are personal.
A hypothetical example
Hypothetical only: a business is paying $1,500 a month on an ATO plan, $900 on equipment finance and $600 on a short-term loan — around $3,000 a month combined. A consolidation facility with an illustrative single repayment of $2,400 a month may look more manageable, but the total cost over the full term could be higher or lower depending on rates and fees applied by the new lender. These figures are illustrative only; confirm real numbers with a broker and your accountant before acting on them.
How the process works with our specialist team
Our tax debt finance team is led by Kevin Knight, Principal Finance Broker and MFAA Accredited Finance Broker with over 20 years in Australian banking. We review the full debt picture before recommending whether consolidation is worth pursuing at all.
- Gather payout figures and your ATO balance in one place.
- Our team reviews the total cost of consolidating versus keeping facilities separate.
- You decide together whether to proceed, with full visibility of fees.
- An application is submitted to a suitable lender, subject to approval, eligibility, terms and fees.
Common mistakes owners make
Owners sometimes consolidate without checking whether an existing facility has an early repayment penalty that erodes the saving they were expecting. Others treat consolidation as if it reduces the amount owed, when it simply restructures it into a different repayment shape. Pledging property to consolidate what were previously unsecured debts is another decision that deserves careful thought and, where appropriate, independent legal advice before signing anything.
Questions owners ask
Questions that come up often about consolidating tax and business debt.
- Can I consolidate ATO debt with other business loans in one facility? Often yes, subject to the lender’s policy and your circumstances.
- Will consolidating reduce how much I owe overall? No — it restructures the debt, it does not reduce the principal.
- Do I need to consolidate everything, or can I pick and choose? You can typically choose which facilities to include, based on each one’s terms.
- What if a current facility has an early repayment fee? Factor that fee into the total cost comparison before consolidating.
- Is consolidation reversible if it does not work out? Generally no — treat it as a considered, long-term decision rather than a trial.
Key takeaway
Consolidation can simplify a tangle of repayments into one manageable facility, but only if the total cost genuinely compares favourably once fees and lost benefits on existing facilities are factored in. Our tax debt finance team can map this out with you alongside your accountant.
Keep exploring
More pages worth a look before you decide.
