Quick answer
A business debt consolidation loan pays out several debts at once — typically ATO arrears, overdue suppliers, rent and expensive short-term finance — and replaces them with one facility. It works best when the business is profitable but the debts arrived at the wrong time. Property-secured consolidation runs from $20,000 to $5,000,000; unsecured options are typically $5,000 to $500,000.
Key points
- One loan pays out many creditors, including the ATO.
- It ends collection pressure, deadlines and multiple repayments in one step.
- It suits profitable businesses with timing problems, not ones losing money.
- Compare the estimated total cost of finance against the cost of staying put.
- Property-secured
- $20,000 to $5,000,000
- Unsecured / cash flow
- $5,000 to $500,000
- Typical debts cleared
- ATO, suppliers, rent, short-term lenders
- Pricing
- Priced on your circumstances; no published rates
When debts pile up, the real exhaustion isn’t the total — it’s the number of them. Each has its own due date, its own collector, its own letter. A consolidation loan takes that whole pile and turns it into one lender, one repayment and one conversation. For a profitable business that fell behind at the wrong moment, that can be the most useful remedy of all.
How does a business debt consolidation loan work?
- You list the debts to clear and their payout figures.
- A lender assesses the business and any security, and approves a facility large enough to pay them.
- At settlement, the lender pays each creditor directly — the ATO, suppliers, landlord, other lenders.
- You repay the new lender on an agreed schedule.
Paying creditors directly matters. It gives everyone certainty that the debts have been cleared, and it ensures the money does what it was borrowed for.
Which debts are usually consolidated?
| Debt | Why it’s worth including |
|---|---|
| ATO: GST, PAYG withholding, super guarantee charge | Ends DPN, garnishee and legal-action risk; stops non-deductible ATO interest |
| ATO: income tax | Stops escalating interest and reminders |
| Overdue suppliers | Restores supply and trade terms |
| Rent arrears | Protects the premises |
| Short-term loans and advances with daily or weekly repayments | Frees up daily cash flow |
| Equipment or vehicle arrears | Keeps essential assets |
If several of these are chasing you now, the which-debt-first sorter shows the order of urgency, and our page on several creditors at once explains the thinking.
Secured or unsecured: which suits consolidation?
- Property-secured, $20,000 to $5,000,000. First mortgages, second mortgages or caveat loans over residential or commercial property owned by the business, a director or a related party. This allows larger amounts and generally more room on the repayment schedule. See second mortgages for tax debt.
- Unsecured or cash-flow, usually $5,000 to $500,000. Sized on turnover and bank statements for trading businesses. Suits smaller consolidations. See unsecured rescue funding.
Bad credit and ATO debt are considered case by case. If you’d like to see which fits your situation, enquire in about a minute — no credit check is run.
How do I know if consolidation will actually help?
Consolidation fixes timing and structure. It doesn’t fix a business that loses money every month. Ask yourself:
- Is the business profitable now, or will it be once a known one-off problem passes?
- Can it meet the new repayment and keep future BAS, super and rent current?
- Is there an exit — a refinance to a bank later, an asset sale, or improved trading that repays the facility?
When comparing, ask for an estimated total cost of finance and set it against what the current debts are costing you: ATO interest (not deductible if incurred from 1 July 2025), late fees, default charges, and the daily repayments on any short-term advances. We never publish rates, because every loan is priced on the business’s own situation.
An illustrative example
Illustrative only. A Ballarat printing business owes two quarters of GST and PAYG withholding, has taken two short-term advances with daily repayments, and is behind on paper and ink suppliers. Individually, none is fatal. Together, they’re draining the account every morning. The owners use equity in their home to take out a second mortgage that pays the ATO, both advances and the suppliers. Daily repayments stop, the supplier accounts go back on normal terms, and the business has one monthly repayment it can plan around.
What does a lender need to see?
- A list of debts with payout figures and statements
- Six months of business bank statements
- The latest BAS and, ideally, recent financials
- An ATO integrated client account statement
- Property details if the loan will be secured
- A short explanation of what caused the debts and what’s changed
Our debt rescue document pack is a full checklist you can work through tonight.
How is this different from a formal insolvency arrangement?
A consolidation pays every creditor in full and leaves you in control. A deed of company arrangement or a restructuring plan usually pays creditors part of what they’re owed, through a formal process. Both have their place. If you’ve been told insolvency is your only option, read alternatives to voluntary administration first.
What mistakes should I avoid when consolidating?
- Leaving a debt out. A consolidation that clears four creditors but ignores the fifth can leave a statutory demand or garnishee still in play. List everything.
- Borrowing just enough for today. Allow for the next BAS and a buffer, or you’ll be back in the same position within a quarter.
- Swapping one daily-repayment product for another. If short-term advances caused the squeeze, replacing them with a similar product doesn’t fix it.
- Ignoring the exit. Know how the consolidation loan will eventually be repaid or refinanced before you sign.
- Stopping the new habits. Consolidation clears the backlog. A separate tax account and a monthly check of your numbers stop it rebuilding.
A good lender will raise these points with you. If one doesn’t, raise them yourself.
Ready to turn many creditors into one?
Consolidation is often the moment an owner sleeps properly again. One lender, one date, one plan — and the ATO off the list entirely.
Tell us about the debts and the business; it takes around 60 seconds. There’s no credit check at the enquiry stage, and we don’t forward your details to a crowd of lenders. A real person reviews it and calls you to talk through what’s possible. Please list the debts and your turnover accurately, so we can size the loan properly first time.
Frequently asked questions
What debts can a business consolidation loan pay out?
Commonly ATO debt (GST, PAYG withholding, super guarantee charge, income tax), overdue supplier accounts, rent arrears, credit cards, equipment arrears and expensive short-term business loans or advances. The loan must be for business purposes.
Can I consolidate business debts with ATO debt included?
Yes. Paying the ATO in full is often the main reason for consolidating, because it ends interest, reminders and the risk of a DPN, garnishee or statutory demand.
Do I need property to consolidate business debt?
Not always. Trading businesses can use unsecured or cash-flow funding, typically $5,000 to $500,000, sized on turnover and bank statements. Property equity allows larger amounts and more flexible terms.
Is consolidation cheaper than keeping my current debts?
It depends. Ask any lender for the estimated total cost of finance, then compare it with the interest, fees and penalties you're paying now, and the cost of the pressure itself. ATO interest incurred from 1 July 2025 is no longer tax deductible, which can tip the comparison.
When is consolidation a bad idea?
When the business is losing money and the debts will simply rebuild, or when it just moves debt from one short-term lender to another without an exit. Consolidation fixes timing, not an unprofitable model.