How to fund a BAS or GST bill you can't cover

The September quarter BAS falls due on 28 October for most quarterly lodgers who do their own lodgement, and plenty of owners open the portal that week to find a figure bigger than the bank balance. That’s not a sign of a failing business. GST is collected over three months, spent on wages and stock in the meantime, then asked for in one lump. Growing businesses are often hit hardest, because the GST on a strong quarter lands just as they’re paying for the next one.

This page starts from that bill and works through the realistic ways to pay it, what each one costs in dollars, and how to stop the same squeeze arriving every quarter.

Step one: get the statement in, money or not

The ATO sees lodgement and payment as two different duties. A statement lodged on time with an unpaid balance is a debt. A statement not lodged at all is a debt the ATO has to estimate, plus a possible failure-to-lodge penalty, plus a mark against your compliance history.

There’s a second reason that matters more for directors. The director penalty regime has applied to GST since 2020. When a company reports its GST on time, directors keep options open that disappear if the statement goes unlodged for months. So whatever you decide about funding, lodge the BAS by the due date.

Quarterly statements land on the 28th of October, February, April and July, while monthly reporters face the 21st of each month for the month just gone. Lodging through a registered agent can buy some extra days, but a later date is all it buys; the amount owing stays the same.

Which options can pay a BAS?

Option	Speed	Best for	What to watch
ATO payment plan	Days to set up online	Debts you can clear over months from normal trading	Interest keeps running and is no longer deductible
Existing overdraft or line of credit	Immediate	A one-off quarter that’s simply bigger than usual	Using the whole limit leaves no buffer for wages
Short-term business loan	1 to 5 business days	A tight but solvent business with steady deposits	Daily or weekly repayments eat into the next quarter’s GST
Property-secured loan	A few days to a few weeks	Larger or combined tax debts, or a business a bank declined	Set-up and valuation costs; only worth it for a meaningful amount
Business credit card	Immediate	Small top-ups only	ATO card surcharges and card costs add up quickly

Banks are a great place to start if you already have a facility with them. An overdraft increase from your own bank is often the cheapest money available, and it’s worth a phone call before anything else. If the bank won’t move because there’s already a tax debt on the account, that’s exactly the situation our ATO tax debt guide is written for.

Why the July 2025 change matters for the comparison

For years, the standard advice was that an ATO plan beat almost any loan, partly because the general interest charge was tax deductible. That’s no longer true for interest incurred from 1 July 2025. Under the new rule, any GIC or shortfall interest that accrues from that date onwards is off the deduction list, no matter which year the original tax belonged to.

In practice, the gap between a payment plan and a well-priced commercial loan has narrowed. Borrowing costs on finance taken out for the business normally remain claimable, so you’re now weighing one after-tax figure against another. Use our loan cost comparison calculator to set two offers side by side in dollars, then ask your tax adviser how the deduction works for a company, trust or sole trader in your position.

This doesn’t mean every loan beats the ATO. A short-term loan with a high total cost will still lose to a plan. But a bank facility, or a property-secured loan held for a few months, may now come out ahead.

The credit-file risk most owners don’t know about

Three tests decide whether the Tax Office may pass a business’s debt details to the credit bureaus. The entity holds an ABN. Its overdue tax totals $100,000 or more and has sat unpaid beyond 90 days. And it hasn’t been working with the ATO on the debt. Sticking to an agreed instalment arrangement satisfies that last test.

Once that report is made, it’s visible to every lender and many suppliers who run a check. It can stop trade accounts, shrink credit limits and make the next loan harder. So if a BAS debt is heading towards that size, either fund it or get it onto a plan before it reaches the reporting stage. The worst outcome is a large debt that’s neither paid nor managed.

Weighing a plan against a loan and not sure? Send us the BAS figure and one of our specialists will ring to work through it.

How much should you borrow?

Borrowing exactly the BAS amount is a common mistake. If the loan repayments start straight away, they pull cash from the quarter in which next quarter’s GST is building, and you can end up short again in three months.

A better way to size it:

1. Start with the full BAS liability: GST, PAYG withholding and any PAYG instalment, from the statement itself.
2. Add any existing ATO balance you want cleared at the same time, so you deal with the whole account once.
3. Estimate next quarter’s GST using our GST calculator on your forecast sales and purchases.
4. Check the repayments against next quarter. If the loan repayment plus next quarter’s GST is more than the business can set aside, borrow a little more or choose a longer term.

Worked example: a $46k quarter at a joinery business

This is an illustration only. A cabinet-making business has a strong winter quarter and its September BAS shows:

Item	Amount
GST payable (net of credits)	$31k
PAYG withholding for staff	$12k
PAYG instalment	$3k
Total due 28 October	$46k

The account holds $18k, with wages of $14k due the following week. The owner lodges the BAS on time. Their bank won’t increase the overdraft because the business already has a small ATO plan from earlier in the year.

They look at two paths. Putting the full $46k on an ATO plan over 12 months would add non-deductible interest and leave the next three BAS statements stacked on top. Instead they borrow $50k over 12 months from a non-bank lender, assessed on six months of bank statements. The extra $4k covers the gap until two large kitchen jobs are invoiced. The loan clears the ATO account, the earlier plan is closed, and the after-tax cost in dollars works out within a few hundred dollars of the plan, without a debt on the ATO record.

Stop the next BAS becoming a crisis

Finance fixes this quarter. These habits fix the next one:

• Keep GST out of the trading account. A second account, topped up with one-eleventh of each sale as the money clears, means the quarter’s bill is sitting there waiting.
• Switch to monthly lodgement if your quarters are uneven. Smaller, more frequent bills are easier to meet.
• Vary your PAYG instalments if profit has dropped, rather than paying instalments based on a better year.
• Read the working capital cycle of your business: if customers pay in 60 days and the ATO wants payment in 28, the gap is structural and may need a standing facility such as a cash flow finance line.

If you’re paying a larger income tax or combined assessment rather than a quarterly BAS, our page on paying a tax bill covers that situation.

Getting this quarter’s BAS paid

We work with business owners on BAS and GST bills every week, including those who already owe the ATO, who’ve been turned down by their bank or who have days rather than weeks. Tax bills bring more owners to our door than almost anything else, and nobody here will lecture you about it.

Allow roughly sixty seconds for the form. Sending it doesn’t trigger a credit enquiry, and your business details stay with us rather than being shopped around the market. Someone from our team reviews what you’ve written and phones you directly. Be precise with the statement amount, the ATO balance and typical monthly deposits, because those three numbers decide which lender we approach first.

Start my BAS funding enquiry →