$600k Business Loan Supporting ATO Debt Consolidation and Property-Led Exit

The client had accumulated a significant ATO liability after prioritising renovation works on a residential property, including managing unexpected cost overruns.

While the underlying business remained active with a healthy future revenue pipeline, the client needed to address several competing pressures:

• A substantial outstanding ATO debt.
• Existing short-term vendor finance requiring repayment.
• A need to improve overall cash flow management.
• The desire to implement a structured deleveraging strategy through the sale of a residential property.

The challenge was finding a funding solution that recognised the strength of the available property security and future exit plan, rather than focusing solely on the existing tax position.

Fifo Capital structured a $600,000 business loan over an 18-month interest-only term.

The facility was used to:

• Clear approximately $500,000 of outstanding ATO liabilities.
• Refinance an existing short-term vendor finance facility.
• Simplify the client's overall debt position.

The transaction was secured by:

• A second-ranking mortgage over a residential property in Freshwater, NSW.
• A first-ranking AllPAAP over the business.
• A personal guarantee from the director.
• A Deed of Priority with the first mortgagee.

For brokers, the key strength of the deal was the security position. The property was valued at approximately $6.75 million, with Fifo's funding resulting in an overall LVR of approximately 78%, leaving substantial remaining equity.

Importantly, the loan was structured around a clearly defined exit strategy, with the property intended to be marketed for sale and the Fifo facility repaid from settlement proceeds.

With funding in place, the client was able to immediately address tax arrears, refinance existing short-term debt, and regain control of their financial position.

The facility delivered:

• Immediate repayment of outstanding ATO liabilities.
• Refinancing of higher-pressure short-term debt.
• Improved cash flow flexibility.
• A defined pathway to reduce overall leverage through property sale.
• A structure supported by substantial property equity and multiple layers of security.

This transaction demonstrates how Fifo Capital can support brokers whose clients have strong asset positions but require a practical solution to resolve tax debt or refinance existing facilities.