A non-bank lender has expressed concern over the recent developments at the Australian Tax Office (ATO), but also highlighted the “significant opportunity for brokers” presented by the updated legislation.
A new bill allows the ATO to inform credit reporting bureaux when a business has a debt of $100,000 for 90 days or more, as long as the entity has not entered into a payment arrangement with the ATO.
Resimac GM of third-party distribution, Daniel Carde, has warned that if small business owners aren’t proactive in engaging with the ATO regarding their tax debt, they could face long-term implications.
“Non-payment of a taxation obligation can become a serious problem for small business owners if it is not addressed. We urge brokers to discuss the management of tax debt with their small business clients,” said Carde.
“Australia’s small business owners are already doing it very tough with economic growth at its slowest rate since the impact of the GFC in 2009. We do not want to see small business owners finding it more difficult to access much needed credit because of a business tax debt they may have incurred many years earlier.”
Resimac offers a specialist product range that can assist small business owners who may need to borrow to pay their debts.
“This segment …represents a significant opportunity for brokers. With more complex income and tax obligations that need to be managed, these customers can often become a ‘client for life’ as their finance needs change over time as their businesses grow,” said Carde.
“The best advice we can give is to be open and transparent around the circumstances surrounding the debt and to get on top of it early. However, if you find a borrower has left it too late and incurred a bureau listing, our specialist product range can also assist in these circumstances.”