Quick answer
Overdue tax returns or BAS don't automatically rule out a business loan. Lenders want to know what's outstanding, why, and when it will be lodged. A tax agent's letter with a catch-up plan and an ATO account statement showing any balance owing answer those questions. Property-secured lenders can often look past overdue lodgements where there's clear equity, while unsecured lenders lean on bank statements.
Key points
- Late lodgements need explaining, not hiding. The ATO already knows.
- Lenders mostly worry about hidden tax debt, so show the ATO balance upfront.
- A catch-up plan from a registered tax agent turns a red flag into a timeline.
- Property security gives the most flexibility when lodgements are behind.
- Quarterly BAS due
- 28 Oct, 28 Feb, 28 Apr, 28 Jul
- Monthly BAS due
- 21st of the following month
- Late-lodgement penalty
- Up to 5 penalty units per document
Why do overdue lodgements worry lenders?
It isn’t the paperwork itself. A lender worries about what overdue lodgements might be hiding:
- Unknown tax debt. If returns and BAS haven’t been lodged, nobody knows exactly what’s owed, including you. Tax debt can grow quickly with penalties and interest, and it competes with the lender for your cash.
- Admin under strain. Late lodgements can signal a business where the owner is stretched thin.
- Numbers that might change. Income figures that haven’t been reported to the ATO haven’t been tested.
Every one of those worries can be answered. The lender needs to see the size of the problem and a believable plan to fix it.
How late is “late”?
The ATO sets clear due dates. For BAS, monthly lodgers are due on the 21st of the following month, and quarterly lodgers on 28 October, 28 February, 28 April and 28 July. The ATO notes eligible businesses lodging online can get an extra two weeks for quarterly BAS, except for the October to December quarter, which already includes a one-month extension.
For individual tax returns lodged yourself, the due date is 31 October. The ATO also says that engaging a registered tax or BAS agent can give you a later due date, so a return that isn’t lodged isn’t always overdue. That distinction is worth making clear to a lender; our guide to showing your returns are in progress explains how.
When something genuinely is overdue, the ATO’s failure to lodge on time penalty is one penalty unit for each 28 days (or part) it’s late, up to five penalty units for small entities. The ATO lists a penalty unit at $364 for infringements on or after 1 July 2026.
What does a lender want to see instead?
| The worry | The evidence that answers it |
|---|---|
| How much is owed to the ATO? | An ATO account statement from online services, or your tax agent’s estimate |
| Is there a plan to catch up? | A tax agent’s letter listing what’s outstanding and target lodgement dates |
| Is the business actually trading well? | Six months or more of business bank statements |
| Is there a payment arrangement? | ATO payment plan confirmation and statements showing it’s being paid |
| What if the plan slips? | Property equity, for a secured loan |
The first two are what turn an awkward file into an ordinary one. A lender who can see “three BAS outstanding, estimated GST owing around $18,000, all to be lodged within six weeks” can make a decision. A lender who hears “we’re a bit behind” can’t.
Our page on ATO online records shows where to find your account statement, and the accountant’s letter page covers what a useful catch-up letter says.
What should the catch-up plan include?
Ask your tax agent or BAS agent for a short, signed letter on their letterhead that covers:
- Which returns and BAS are outstanding, by period.
- Their best estimate of any tax payable once lodged.
- The order and target dates for lodging.
- Whether any payment arrangement is in place or planned.
- Confirmation they’re engaged and acting for you.
Keep it factual. Lenders read these letters every week and trust plain ones more than glowing ones.
Which loan routes work while you catch up?
Property-secured. First mortgages, second mortgages and caveat loans run from $20,000 to $5,000,000 against residential or commercial property. Because the equity is the lender’s main comfort, overdue lodgements are often a condition to fix rather than a reason to decline. Some owners use this route specifically to clear tax debt and fund the business while the lodgements are brought up to date. See low doc secured business loans.
Unsecured and line of credit. Typically $5,000 to $500,000, sized on turnover and bank statements. With overdue BAS, the statements do most of the work. Expect more questions about ATO debt, and be ready with the numbers.
In both cases, bad credit and ATO debt are considered case by case, and loans are for business purposes only.
Illustrative example: three quarters behind
Illustrative; not a real business.
A landscaping company’s bookkeeper left mid-year and three quarterly BAS went unlodged. The director needs $120,000 for a bobcat and truck upgrade ahead of a large estate landscaping contract. He owns his home with substantial equity.
The file includes a letter from a registered BAS agent confirming all three BAS will be lodged within four weeks, an estimate of the GST owing, twelve months of business bank statements, and the property details. A secured lender can proceed with lodging the BAS set as a condition before settlement, and part of the loan earmarked to pay the GST once assessed.
What makes it harder?
- Not knowing the number. “I don’t know what I owe” is the answer that stalls files. Get an estimate first.
- Hoping the lender won’t ask. They will.
- Letting it run. The ATO says to phone them before the due date if you can’t lodge on time. Contact early usually leads to better outcomes than silence.
- Using a loan to paper over an unviable business. Finance works when the business is sound and the paperwork is behind, not the other way round.
Talk to someone who deals with this daily
Overdue lodgements are one of the most common things we see, and one of the most workable once the numbers are on the table. Tell us where things stand. The enquiry takes about a minute, there’s no credit check when you first enquire, and your details are kept with one team instead of being shopped around.
A specialist will call, ask what’s outstanding and what you think is owed, and tell you honestly which route fits. Accurate answers on the form, particularly about ATO debt, save time for everyone. Start your 60-second enquiry.
Frequently asked questions
Will a lender find out my lodgements are overdue?
Usually, yes. Missing BAS show up as gaps, an ATO statement shows outstanding lodgements, and lenders ask directly. It's far better to tell them upfront with a plan than to have it discovered.
What is the ATO penalty for lodging late?
The ATO's failure to lodge on time penalty is one penalty unit for every 28 days a document is overdue, up to five units, with multipliers for larger entities. The ATO lists a penalty unit as $364 for infringements on or after 1 July 2026.
Should I lodge everything before I apply?
If you can, it widens your options. If you need funds sooner, apply with a catch-up plan and keep lodging in parallel. Some lenders will set lodging the outstanding returns as a condition.
Can a loan pay my tax debt as well?
Loans for business purposes can include paying ATO debt, and ATO debt is considered case by case. A specialist will explain whether that fits your situation.
Does using a tax agent give me more time?
The ATO says engaging a registered tax or BAS agent can give you a later due date for lodgement. Check with the agent what applies to you.