Individuals and businesses alike are mandated by law to pay their taxes diligently and on time. For business owners, especially small and medium enterprises, local tax laws may be difficult to manage because the law seems to these groups of taxpayers. However, the law is the law, and everyone should follow it.
Small and medium business enterprises were the ones badly hit by the pandemic on a worldwide scale. Even those businesses that have been in operation for decades had to temporarily stop operations and some eventually had to close or file for bankruptcy.
The government has extended help to businesses and individuals by giving out swift economic relief packages and providing financial assistance to those that have been hardly hit by the pandemic. The Australian government also gave tax grants for a certain period to those affected. However, these government responses do not necessarily translate to tax exemptions simply because the government also needs the taxes to keep its treasury and coffers going.
As we all know, taxes are the lifeblood of the economy. Taxes fund the strong health care system and other benefits that Australians are enjoying. So, with the tax problems being faced by small and medium enterprise business owners, what can be done to help alleviate and cut down on costs and the hassles of going through debt collectors and eventually the Australian Taxation Office from coming after you for tax debt settlements?
Banks offer long term business loans but they rigidly follow the strictest of standards when it comes to loan applications. Even if you have been a long-time client of your bank, there would still be kinks along the way especially if your business’s current financial situation is not appealing now. They may be able to help but only to a certain extent. And normally, business loans from banks take some time to get approved, again, because of the rigid screening process your application must go through. So if you immediately need the loan proceeds, then probably going to the bank will not be the best way to go for now.
Fortunately, Australia has a lot of private financial companies that can help in refinancing your tax debts, offer short term business loans and secured business loans in order to help settle your business tax debts. Business owners and individuals may easily apply for these short term business loans and secured business loans via the online facilities of the private lending companies or even banks that are offering them. Short term business loans are payable within a few months up to a year. Also, there are even lending companies that offer an extended repayment schedule for up to two to three years depending on the loan amount and the terms of the short term business loans available with your credentials.
If the business owner has fixed assets that may be used as collateral security, he or she may opt to apply for secured business loans. The collateral security may be in the form of the business’s fixed assets and may be used in lieu of a bad credit rating or standing. Technically, any fixed asset of the business that could easily be turned into cash may be used as collateral security in applying for secured business loans. Interest rates may be higher but still relatively lower compared to applying for an unsecured business loan.
There are also mortgage companies that you can consult for taking out private mortgages and 2nd mortgages out of your already existing business and/or personal real property. To those who already have 1st mortgages out of their existing house or building, 2nd mortgages may be taken from these assets. Although your total debt amount may increase because of 2nd mortgages, the business owner may be able to consolidate all outstanding debts, including that of taxes owed to the government, and just pay one big amount during the repayment period. Note that since the property already earned some equity over the period of time that it was in possession of the business owner, the loan amount granted could be a lot higher than expected, which is definitely beneficial to the business owner. Of course, it would also be right to say that the bigger the amount of the loan, monthly payments plus interest would be a lot higher as well.
The Australian Tax Office still exercises maximum tolerance and due process in their efforts and means to collect the taxes that are owed to them without sending court summons right away. They use external debt collection agencies to help them collect the taxes from individuals and businesses. The ATO is also open to face appeals on possible errors on their tax assessments on individuals and businesses alike. However, it is best that the taxpayers, particularly business owners, must also find ways and means to settle their tax obligations to the government.
Business loans, whether they are private mortgages, 1st mortgages, 2nd mortgages, secured business loans, or short term business loans, are there to help business owners settle their tax debts and dues to the government. The business owner should discuss this matter in depth with his or her finance team, the business’s accountant and even the business’s auditor to iron out tax deficiencies and prevent the business and the business owner from receiving further legal action such as possible garnishment of the business owner’s properties and even being blacklisted from further doing business for non-payment of tax debts. The management team should be able to come up with a good plan, through their knowledge and collective inputs, to put the business’s assets into good use, in order to save the business and the business owner from the adverse effects of non-payment of its tax obligations.
It may turn out that being granted short term business loans would be an additional expense to the business. However, it would be an eventual lifesaver to the business operations as a whole, and to the business owner (the taxpayer) to be able to settle tax deficiencies and debts through the help of these short term business loans.