Can You Get a Home Loan or Business Finance if You’re Self-Employed with Tax Debt?

Quick Answer 

Yes — it is still possible to get a home loan or business finance if you’re self-employed, even if you have ATO tax debt.  Many lenders will look beyond just your tax position and consider your income, cashflow and whether your debt is under control. The key is knowing which lenders to approach — and how to structure the application properly.  

Running a business today isn’t just about doing the work — it’s managing everything around it.

From tax and compliance to wages, insurance and rising costs, many self-employed Australians are under pressure to keep things moving while still trying to grow.

For accountants, this shows up clearly in the numbers.
For business owners, it shows up in cashflow, stress and uncertainty around what to do next..

The good news?

What’s changed for self-employed lending?

The Federal Government has confirmed it will extend the Small Business Responsible Lending Obligation exemption for another 10 years.

This is designed to make it easier and faster for small businesses to access credit by reducing red tape around lending for genuine business purposes.

For self-employed clients, this means more flexibility — and more opportunity to explore funding options earlier.

There are more finance options available than most people realise — especially for self-employed clients — if you look at the right time.

Why many self-employed clients feel stuck.

We’re working with more self-employed clients (and their accountants) dealing with:

  • ATO tax debt or payment plans
  • cashflow pressure
  • multiple debts across personal and business
  • needing vehicles, equipment or working capital
  • wanting to grow but unsure how to fund it
  • uncertainty around borrowing due to self-employed income

Most are not doing anything wrong — they just haven’t had a chance to step back and explore their options properly.

Can you get a home loan if you have ATO tax debt?

Yes – in many cases you can still obtain a home loan with ATO tax debt.  Some lenders will consider your application if you have a formal payment arrangement in place.  A good mortgage broker will know based on what they can see what lender options there are.

Finance options for self-employed clients

1. Tax Debt Consolidation (ATO Debt)

  • consolidating tax debt into a business or personal loan
  • refinancing a home loan to clear ATO debt
  • restructuring multiple debts into one manageable repayment

This can help reduce pressure, improve cashflow and regain control.

2. Refinance Your Home Loan for Business Purposes

Options may include:

  • refinancing a home loan
  • accessing equity
  • using funds for business purposes (including debt consolidation or reinvestment)

This is often a lower-cost and more structured option, depending on the client’s situation.

3. Business Loans for Cashflow or Growth

Options for:

  • working capital
  • managing short-term pressure
  • consolidating debts
  • funding growth opportunities

For accountants, this can support clients who are profitable but experiencing timing and cashflow gaps.

4. Asset Finance (Vehicles, Equipment and Machinery)

  • cars, utes and vans
  • equipment and machinery
  • tools and business assets

This helps preserve cashflow and supports growth. Learn More Here

Can you refinance if you’re self-employed?

Yes – many self-employed clients refinance their home loan, even with complex income or existing debt.  The key is what lender is applied to and what income can be used.  Using a mortgage broker can be key in the home loan process especially for those who are self-employed.

Self-employed lending is becoming more flexible than many think

A common misconception is that:

  • you need two years of perfect financials
  • ATO debt rules you out

In reality, we are seeing:

  • Low doc and alt doc lending options are increasing
  • some lenders accept 1 years financials 
  • some lenders are more flexible with income structures
  • ATO payment arrangements, can at times be accepted or overlooked 

The key is making sure everything fits together properly — income, debts, repayment capacity and the overall story behind the application.

For both business owners and accountants, this means it’s always worth asking the question before assuming no options exist.

Real Example: Self Employed client with ATO tax Debt

A business owner came to us with ATO tax debt and strong income but had been declined by their bank. On paper, it looked like a simple “no” — but the issue wasn’t the income, it was how the scenario was being assessed. By reviewing the full picture and approaching a more suitable lender, they were able to refinance, improve cashflow and create a more manageable structure moving forward. This is a common situation — where the right lender and structure can make all the difference.

Read our Real Example Case Study

Final thoughts

For self-employed clients, financial pressure is often not caused by one issue — it’s the accumulation of multiple moving parts.

For accountants, this creates an opportunity to guide clients beyond compliance and into proactive tax planning.

And for business owners, it comes down to one simple step:  Don’t wait until things become urgent to explore your options.

We are here to help. www.whitestar.com.au or call:  Ph: 1300 652 842

Talk to WhiteStar Finance & Conveyancing to explore your options, improve your finances, or plan your next steps with confidence.

Frequently Asked Questions

Unlike going directly to a bank, we compare multiple lenders and tailor a solution to suit you.

With over 30 years’ experience, we specialise in both straightforward and more complex scenarios — often finding solutions where others can’t.

As mortgage brokers, we’re also bound by Best Interests Duty, meaning we’re legally required to act in your best interests — not the lender’s.

We can review your options (including your credit file) without leaving multiple enquiry marks that may impact your score, so you can explore what’s possible with confidence.

With strong reviews, real client results, and conveyancing support in Victoria, we’re here to guide you from start to finish.

Read our Reviews and Case Studies to know more

Poor credit generally refers to your overall credit history, including missed repayments, defaults or high levels of debt.

Your credit score is a number that reflects this history at a point in time. While your credit score is important, lenders also look at the bigger picture — including your income, expenses and ability to repay.

This means some borrowers may still be eligible for home loan if their credit score is lower. Lenders have different criteria, it about knowing who will help with a bad credit score and also who will help with bad credit like defaults and arrears.

WhiteStar Reviews

If you’re self-employed and having trouble proving your income, it’s still worth exploring your options  with a mortgage broker before applying. Many lenders assess income differently, and some offer alternative income options with more flexible documentation requirements.

Rather than applying directly and risking a decline, it’s best to speak with a broker first. At WhiteStar, we’ll guide you on what paperwork may be accepted by different lenders and help you understand your options before you apply.  If you are about to lodge your tax returns, it can be a good idea to wait and speak to a broker before they are lodged. 

Self Employed Home Loan Case Study

Yes, a home loan is often still possible after missed repayments. Some lenders offering bad credit home loan solutions or poor credit options will look at your current position and ability to meet repayments moving forward. Also the story and events behind these arrears are also important for finding what options are available.  Our Home Loan Brokers often look deeper and try to get an everyday home loan solution if we can. Its important to understand your options before the arrears grow.  We always recommend in times of financial pressure to pay the mortgage first.  Ideally come to an experienced broker to not end up Trapped with finances you cannot manage as soon as possible.

 Great Case Study

Yes, in many cases you can still obtain finance even if you have ATO tax debt. Some lenders will consider your application if you have a formal ATO payment arrangement in place, and the overall scenario (income, repayments and conduct) meets their criteria.   In some situations, finance can also be used to consolidate and clear ATO debt, which may reduce ongoing interest and improve cashflow.

Yes, many self-employed clients refinance their home loan to access equity for business purposes. This can be used for:  clearing tax debt, consolidating other debts , funding business growth, purchasing equipment or assets.  Because home loans are typically lower cost than unsecured lending, this can be a more structured and cost-effective option, depending on your situation.  Not all lenders like the funds purpose to be for business but many do.

Not always. While some lenders still require two years, others now accept: 1 year of financials, some accept alternative or low doc income verification and some accept different types of income depending on your industry and structure.  This is why it’s important to review your options, as lender policies can vary significantly. Its is a great idea to chat with a broker while your returns are in DRAFT in case a small amendment can make the difference.

Nearly 77% of home loans in Australia are arranged through mortgage brokers — because they offer a wider, more tailored range of options.

A broker compares multiple lenders (not just one bank), helping you find the right fit — especially if you have a poor credit score or need bad credit options.

We also follow Best Interests Duty (BID), meaning we must act in your best interests, and we can assess your options without leaving multiple credit enquiries on your file, which can impact your score.

Read some of Our Reviews Here

 

 Yes — this is where asset finance comes in.  You can finance:  vehicles (cars, utes, vans), machinery and equipment , tools and business assets.  This allows you to:  preserve cashflow, spread the cost over time, potentially align repayments with business income

Yes — refinancing can reduce repayments by securing a lower rate, restructuring your loan, or consolidating debts.

We help clients with this every day and have many case studies where repayments have reduced significantly.

Where possible, we aim to maintain your loan term, but sometimes extending it forms part of the solution. The key is ensuring the refinance genuinely improves your position.

Read a Case Study Here

Many Australians use an SMSF to gain more control and transparency over their super, including the ability to invest directly in property as part of a long-term strategy.

However, SMSF property lending is highly regulated. You generally need:

  • sufficient super balance (often $200k–$300k+ as a guide)
  • the ability to service the loan rent and contributions  (your income and contributions still matter)
  • the correct SMSF and bare trust structure set up before purchase

Not everyone will qualify, and lending options are more limited than standard home loans.

It’s important to speak with a broker early to confirm eligibility before spending money on advice or setup, as getting the structure or timing wrong can be costly.

Read our Blog

How to Buy in your SMSF Blog

SMSF loans are structured differently to standard home loans. The property is typically held in a separate (bare) trust, and lending options are more limited.

Buying a property inside an SMSF can be a smart strategy — but only when the structure, lending, compliance and long-term planning are done correctly.

If you’d like help checking borrowing capacity the team at WhiteStar Finance & Conveyancing can guide you on the process and finance criteria & eligibility, however we cannot offer legal and financial advice as to whether a SMSF or Purchasing in your SMSF is suitable for your individual circumstances.

Read More Here

Yes in many cases you can get a home loan with Bad Credit.  Options are very much dependent on the situation and financials.

You Might Have More Options Than You Think

Many people come to WhiteStar thinking they need a bad credit home loan and that their options are limited.

In many cases, once we understand the full background, we’re able to help secure a standard home loan — simply by matching the right lender and approach to the situation.

Just because your credit score is low doesn’t always mean you’re out of options.

See some of Our Case Studies