Finance question
Can I get finance with both tax debt and a default?
Often yes, even with both. Equipment finance is secured by the asset, so an ATO debt and a credit default do not automatically stop it. The two issues narrow the lender panel rather than close the door.
Get your free rate quote
Tell us a few details and we will come back with your indicative rate. No obligation.
Thanks, we are on it
Your enquiry is in. Our team will be in touch shortly with your indicative rate and next steps.
The short answer
Two red flags, not two closed doors
Carrying an ATO debt and a default at the same time will get you a fast no from a bank, which runs a single credit policy. Across a panel of 40+ lenders the picture changes. Some lenders will consider an application with both, particularly when the equipment secures the loan and each issue can be explained.
The asset does the heavy lifting. Because the finance is secured against the machine or vehicle you are buying, the lender's risk sits in the asset rather than resting entirely on your credit file. That is why a paid or explained default and an ATO balance under a payment arrangement can often be worked around.
How the ATO debt is being managed matters. Left on the ATO, that debt sits at an interest rate well above single-digit rates, and a lender wants to see it is under control. A formal payment plan, or a plan to clear it, gives a lender a reason to proceed rather than decline on sight.
Do you qualify?
What still makes the deal fundable.
A specific asset
The equipment you are buying secures the finance.
An explainable default
Paid or explained defaults can be placed with the right lender.
A managed ATO debt
A payment plan shows the balance is under control.
A deposit can help
It lowers the lender's risk when the file is complex.
Why both issues can still be worked around
The asset secures it
Security in the equipment offsets what your credit file cannot.
Lenders differ
What one declines outright, another will price and place.
Structure and story
A managed ATO plan and an explained default change the answer.
A real example
A builder with a $30,000 ATO balance on a payment plan and an old paid telco default needs a $70,000 excavator. His bank declined on the file. Placed with a lender that reads the full picture, secured on the machine and supported by the payment plan, it was approved with a modest deposit. Illustrative only.
Common questions
Frequently asked questions
Does having both an ATO debt and a default guarantee a decline?
No. Some lenders consider both together, especially when the asset secures the loan and the ATO balance is under a payment plan.
Do I need to clear the ATO debt first?
Not always. A formal payment arrangement often satisfies a lender that the balance is being managed.
Does it matter if the default is paid?
It helps. A paid and explained default reads far better than an outstanding one, and widens the lenders that will look at it.
Will a deposit make a difference here?
It can. On a complex file, a deposit lowers the lender's exposure and can be the difference between yes and no.