3 ways small business owners can repay ATO debt

At one point or another, otherwise healthy, thriving small business owners find themselves with ATO debt due to unforeseen circumstances. Even if they’re meeting ATO payment plan obligations, they may be prevented from obtaining further lines of credit, limiting cashflow and inhibiting growth.

If you are in this situation, the experienced team at Classic Funding Group may be able to assist. We work with you to understand your situation and requirements, to propose a finance solution to payout your ATO debt and remove this impediment in seeking further lines of credit.

SALE-BACK 

We often achieve this through a Sale-Back of their existing equipment, whereby you sell your eligible assets to us and lease them back on a term that suits your cashflow, using the funds raised to repay the ATO. Whilst these transactions are often more complex than a standard equipment finance arrangement and may take more time, you can be assured that the Classic team is eager to assist you and will delve into the detail to determine how we can assist.

Is Sale-Back a solution for you?

• In Business for a minimum of 2 years
• ATO debt is not an ongoing issue and there is a reasonable explanation for why the debt occurred
• Business is meeting all ATO payments plan obligations
• Sufficient assets to satisfy the ATO debt

 

DEBTOR FINANCE 

Where your business does not have suitable plant and machinery to use for a Sale-Back facility, a Confidential Debtor Finance facility may be a viable option. Also known as Invoice Discounting, Confidential Debtor Finance may be a good way to raise capital to repay the ATO arrears without taking on additional debt. Real estate security does not need to be provided as collateral and once the facility has been established, funds are generally available within 24 hours of uploading the debtors ledger to the online portal.

Is Debtor Finance a solution for you?

• In business for a minimum of 2 years
• Sell on credit terms to businesses
• Turnover of $1M or more
• Borrowing requirements over $250k
• ATO debt is not an ongoing issue and there is a reasonable explanation for why the debt occurred
• Business is meeting all ATO payment plan obligations

 

INTEGRATED FINANCE 

We often propose an Integrated Finance solution where a business has some equipment to use for a ‘Sale-back’ but not sufficient to raise the entire amount required to settle the ATO debt, but the business qualifies for a Debtor Finance facility. Combining a confidential debtor finance facility to release equity in the debtor ledger, whilst raising additional funds from available equipment through a sale-back facility is an effective way of raising required funds.

Is Integrated Finance a solution for you?

• In business for a minimum of 2 years
• Sell on credit terms to business
• Turnover of $1M or more
• Borrowing requirements over $250k
• ATO debt is not an ongoing issue and there is a reasonable explanation for the why the debt occurred
• Business sis meeting all ATO payment plan obligations
• Business owns assets but not enough to ssatisfyATO debt

 

There are always exceptions and special circumstances that do not fit in a neat box, so get in touch if you need an alternate funding solution!

David Wright is an experienced business finance specialist with Classic Funding Group, an Australian owned finance company providing innovative asset finance solutions to SMEs since 1992.