How We Cleared a $350K ATO Tax Debt and Freed Up $10K/Month in Cash Flow
A growing family wanted to renovate their home. A $350,000 ATO tax debt said no.
Cost blowouts and a run of one-off events had left our client’s business owing the ATO $350K. Their mortgage broker referred them to us because the debt made quality bank refinancing impossible — and even if a bank would look at them, they didn’t want business debt secured against their family home. Here’s how we fixed both problems.
The Problem: ATO Debt Blocks Bank Refinancing
Banks are cautious about active ATO debt. Even strong applicants get knocked back once a tax debt shows up, regardless of the reason behind it. For this client, that meant no serviceable path to the renovation loan their growing family needed — and a business debt they didn’t want anywhere near their home title.
Step 1: Clear the ATO Debt With an Unsecured Business Loan
Rather than wait on a bank, we used a lender that specialises in unsecured business finance and bank-statement-based lending specifically for ATO debt clearance. This isn’t a standard product — it requires a lender with real niche capability in reading trading history and structuring around tax debt.
We structured the loan over 5 years, with no penalty if paid out from the 6-month mark. That flexibility mattered: it gave the client room to refinance again once their credit position improved, without being locked in.
Result: $5,000 a month in cash flow freed up, compared to their existing ATO repayment plan.
Step 2: Refinance to a Major Bank at a Lower Rate
With the ATO debt cleared, the client now had a clean tax portal — the single biggest barrier to bank finance was gone. That let us move them from the higher-rate unsecured facility to a major bank at a materially lower rate.
Result: repayments dropped again, stacking on top of the Step 1 savings.
The Outcome
Close to $10,000 a month in freed-up cash flow compared to when we first met them – Business debt sitting in the business — not against the family home
A clear runway to work with their mortgage broker on a home loan that funds the renovation
Why This Works
ATO debt doesn’t have to mean waiting years to pay it off at a punishing rate, or giving up on refinancing altogether. The key is sequencing: clear the debt first with a lender built for that purpose, then use the clean position to access mainstream, lower-cost finance. Done right, it’s a bridge — not a permanent fix.
Got a Client Stuck on ATO Debt?
If tax debt is blocking a client’s refinance, home loan, or renovation plans, get in touch. We work directly with mortgage brokers to structure a path through — so your client keeps their finance clean and their home loan on track.