Flakus and Associates is well versed in business finance, having successfully assisted clients to obtain business finance, whether purchasing an established business (including franchises), refinancing or restructuring their current business finance needs. And more recently, we have been involved in assisting clients who have to manage their ATO debts.
The Australian Tax Office (ATO) is taking proactive steps to mitigate the risk of tax delinquency among businesses across the country. Over recent months, the agency has warned businesses with over $100,000 in tax debts that they may be referred to a collections agency if they do not take action within 28 days.
Additionally, the number of DPNs (Director Penalty Notices) have also risen. The ATO’s preferable position is to work with the taxpayer through engagement as opposed to enforcement. However, where taxpayers do not choose to engage, the ATO will take firm action(s) which could include garnishees, recovery of directors’ penalties, disclosure of business tax debts and other legal actions.
Emerging from the COVID-19 pandemic, the ATO is also focusing on so-called “zombie companies” that have managed to stay afloat during the pandemic.
The description of a “zombie company” as described in Wikipedia is as stated :
“Zombie companies are indebted businesses that, although generating cash, after covering running costs, fixed costs (wages, rates, rent) they only have enough funds to service the interest on their loans, but not the debt itself. As such, they are generally dependent on refinancing of maturing debt for their continued existence, and may face solvency risks should interest rates rise or investors withdraw from further financing.”
~ political economy, a zombie company is a company that needs bailouts in order to operate, or an indebted company that is able to repay the interest on its debts but not repay the principal.
Whilst most of the major lenders offer business finance predominately focusing on business operations, any ATO and Superannuation Guarantee Liabilities are generally not well received by the mainstream lenders and can often lead to the lender’s unwillingness to assist.
Most business owners are far too busy to deal with the bank. Engaging the services of a professional finance broker can certainly enable the finance broker to become the conduit between the client and the lender to facilitate the navigation of the process.
Flakus & Associates are experienced in, and is currently seeing more and more commercial/business clients seeking financial guidance and assistance to help manage and clear their ATO debts.
Contact Paul to discuss your current business financial position or any future business and equipment finance requirements you may be considering. As a business owner himself, he is only too happy to accommodate your personal time constraints regarding meetings where required.