Why the interest cost matters
When comparing options, look beyond the headline ATO balance. Consider the ongoing interest cost, the length of any payment arrangement, the business's capacity to remain current on future obligations, and the total cost and risk of any alternative funding.
Do not use a stale rate
GIC rates change over time. Use the current ATO rate and your actual statement when modelling the cost of leaving debt outstanding rather than relying on an old percentage quoted online.
Deductibility changed from 1 July 2025
The ATO states that GIC incurred in income years starting on or after 1 July 2025 is no longer deductible, and the change also applies to SIC incurred from that date. Businesses should obtain tax advice on their own circumstances.
Compare the whole solution
Replacing an ATO balance with commercial finance may change timing, security, covenants and total financing cost. A lower nominal rate does not automatically mean the transaction is appropriate.
Official source
General information only. This page does not constitute legal, tax, financial or credit advice. SME Capital Partners is in pre-launch and is not currently offering or approving credit through this website.