When the pandemic hit we saw a new lender enter the market. This lender was reasonably priced, had great terms and fast turnaround times.
Unfortunately, this lender is now starting to call in its debts.
The ATO’s $60B debt collection has begun and it’s time to get your ducks in a row so you’re not subject to the ATO’s “firmer action”.
During the pandemic the ATO placed a freeze on debt collection which gave relief to SMEs who were affected by the lockdowns, supply chain breakdowns, loss in consumer confidence and more. This approach was accommodative and necessary at the time but in the words of the immortal Bob Dylan, The Times They Are A-Changin’.
Of course, the ATO is not out to hurt anyone and they will help you if you put your hand up and don’t in their words, “stick your head in the sand”.
But, in the post-pandemic world (at least in theory…) it’s time for the ATO to start collecting their debts and get back to their core business of collecting taxes and not deferring payments.
If you have ATO debt, what’s the best approach for you and your business?
Do not ignore the problem.
CreditorWatch Chief Executive Patrick Coghlan has said “our data shows that court actions are back to pre-COVID levels and the ATO has also stated that it is ramping up legal action for outstanding debts.”
The July CreditorWatch Business Risk Index (BRI) shows that external administrations and court actions are up 50% since April and 46% year on year, while court actions are up 54% year on year.
Not all funders see ATO debt refinancing as a sign of weakness or distress. Mortgage brokers in particular are finance professionals who know a good opportunity when they see it. So, we understand that many availed themselves of the ATO’s accommodative stance – because they could. But now that game is over.
How to unwind your ATO debt in a structured way
Credit conditions still allow you to refinance and consolidate all your debts (including credit cards and other business related loans) into one loan so the principal and interest are paid down over a longer timeframe. This relies purely on your recurring trail, fee or commission income. This gives you the peace of mind that you won’t incur any additional charges or penalties, but in many cases, you may even qualify for a refund of interest.
At Trailblazer our turnaround times are fast, it takes only 3 weeks from enquiry to settlement. Loan amounts start at $30,000 and go up to as much as $1,300,000 for selected borrowers. Loan terms are flexible ranging from 2-5 years.
What you need is a clear plan to clear your ATO debt and unlock the working capital your business needs to grow and prosper. Set up your business for success this financial year and for years to come.
If you’d like a confidential discussion about clearing your ATO debt, you can reach out to Daniel Cordukes by calling him on 0416 062 572 or send him an email at:
danielc@trailblazerfinance.com.au.
Sincerely,
Jeff
Jeff Zulman is the Founder and Managing Director of Trailblazer Finance, a specialist financial services lender offering business loans, valuations and M&A buy/sell advice, specifically tailored for Mortgage Brokers.