Are your tax liabilities up to date?
Many small businesses have previously treated the ATO as an overdraft or line of credit to fund their business when cash flow has been tight. While this was never a great idea, it is now worse than ever to do this. But why?
Firstly, until this year the ATO never reported your debt to the credit reporting agencies – but they do now, meaning that your credit rating can be adversely impacted by not paying your tax (and this includes your GST payments).
Secondly, most lenders are now asking you to provide a report from the ATO showing that you have been paying your liabilities promptly – this report routinely goes back 12 months. So if you pay late it will impact on your ability to obtain a loan for at least 12 months unless you have a really good reason.
This does not mean that being late will exclude you from getting a loan. However, it may make your loan more expensive and exclude you from no doc and lo doc equipment loans. If you are in doubt give us a call on 1800 734 346 to discuss your business lending needs and we can explore the options.