Pay IRD, keep trading
IRD tax debt loans
Pay Inland Revenue in full and repay a lender over a term that suits your cash flow. Worth comparing against an IRD instalment arrangement first.
IRD Tax Debt Loans at a glance
- Amount
- Within our $5,000 to $500,000 unsecured range
- Term
- Up to 60 months
- Security
- Often unsecured. A personal guarantee is standard.
- Time to funding
- Usually a little longer than a standard unsecured loan, because fewer lenders fund tax debt and some will want to see your IRD position.
- Typical use
- A GST bill, PAYE arrears, a provisional tax or terminal tax payment, an income tax debt, or clearing an existing IRD instalment arrangement
- What you'll need
- Your IRD statement or a myIR screenshot showing the balance, your NZBN or company number or trading details, photo ID, and recent bank statements
What it is
What is an IRD tax debt loan?
An IRD tax debt loan is a business loan used specifically to pay a tax liability to Inland Revenue: GST, PAYE, provisional tax or income tax. You pay IRD in full and repay the lender over an agreed term. The cost does not disappear; it moves from IRD to a commercial lender with a fixed repayment you can plan around.
Businesses do it to stop use of money interest and late payment penalties building up, to pay a large bill without draining working capital, or to spread a lumpy bill such as provisional or terminal tax. Not every lender funds tax debt, and some exclude tax arrears outright, which is why this deal is worth broking rather than applying blind.
IRD also offers instalment arrangements, agreed directly with Inland Revenue. For some businesses that is the cheaper and simpler route, so look at it first.
Worked example
A worked example
- A transport company in Canterbury has an $80,000 GST and PAYE debt and does not want to empty its working capital to pay it.
- IRD charges use of money interest on tax paid late, and late payment penalties can apply on top. The rates are set by IRD and change, so check the current position on ird.govt.nz.
- The business borrows $80,000 over 24 months and pays IRD in full.
- The comparison to make is that total against the cost of an IRD instalment arrangement, or of paying late.
Your accountant should run both numbers: the loan and an IRD instalment arrangement, including any tax deductibility of the interest.
Is this right for you?
Is an IRD tax debt loan right for you?
Good fit if…
- You have a GST, PAYE, provisional tax or income tax bill you cannot comfortably pay in one go.
- Your returns are filed, or you have a clear plan to file them.
- Paying the bill from working capital would leave you short for wages, stock or suppliers.
- An IRD instalment arrangement is not available to you, or does not give you enough time.
Probably not if…
- The business is not viable and the tax debt is a symptom. Borrowing extends the timeline, it does not fix it. Speak to a licensed insolvency practitioner instead.
- You are well behind on filing returns with no plan. Most lenders want filings current even when payment is not.
- IRD will agree an instalment arrangement that suits you and costs less than a lender would charge.
- You would be borrowing to pay every GST return, every period. That is a pricing or a margin problem, not a finance problem.
- You have not spoken to your accountant. This is one decision that should never be made without them.
What it costs
What an IRD tax debt loan costs
Most lenders treat tax debt as a higher-risk use of funds and price it that way. Compare the cost against an IRD instalment arrangement and against IRD's use of money interest and penalties, not against a standard business loan.
- Interest rate
- Rates are set by the lender for your deal, not by us, and depend on your trading, your credit file and the product. Tax debt funding usually prices above a standard unsecured loan because the panel is smaller and the use of funds is considered higher risk.
- Arrangement fee
- A one-off fee, often deducted from the advance, so borrow enough to cover the IRD balance after the fee comes out.
- Ongoing fees
- Some lenders charge a monthly account fee.
- Paying it out early
- Ask before you sign. If the business recovers faster than expected, an interest rebate on early settlement is worth real money. Not every lender offers one.
Bizzloans is a commercial finance broker, not a lender. The lender that funds your deal pays us a commission, which we disclose to you. You pay us nothing to compare.
Eligibility
Who can apply
- A New Zealand business: limited company, sole trader, partnership or trust
- Photo ID (passport or NZ driver licence) for each director, partner, trustee or owner
- In business for at least 6 months
- Turnover of at least $6,000 a month
- Bad credit considered
- Tax returns filed, or a clear plan to file them
Don’t meet these? Talk to us. We have lenders for most situations, and we’ll tell you straight if we don’t.
Contact usWhat you'll need
What you’ll need
No documents
To get a quote
- Nothing. Tell us the amount owing, which tax it relates to, when it is due, and whether your returns are filed.
- No credit file is pulled to compare.
Once you pick a lender
To settle
- Your IRD statement of account, or a screenshot from myIR showing the balance
- Recent business bank statements
- Your NZBN or company number, and photo ID and proof of address for each director
- Details of any existing IRD instalment arrangement
- Loan agreement, personal guarantee and direct debit authority
How it works
How it works
A few minutes
Tell us the debt and the position
How much is owed, which tax it is, whether it is due or already overdue, whether there is an IRD instalment arrangement, and whether returns are filed. All of these change which lenders will fund it.
Once your details are in
We go to lenders that fund tax debt
Not all of them do. Applying blind to a lender that excludes tax debt as a use of funds wastes time and leaves an enquiry on your credit file. We only approach the ones that fund it.
Once approved
Pay IRD, repay the lender
Funds are advanced so the liability can be paid in full, and you repay the lender monthly over the agreed term. Keep IRD's confirmation of payment.
This vs the alternative
Tax debt loan vs IRD instalment arrangement
Both spread the cost. They work differently, and an instalment arrangement is worth asking IRD about first.
| Tax debt loan | IRD instalment arrangement | |
|---|---|---|
| Who you owe | A commercial lender. IRD is paid in full. | IRD, in agreed instalments. |
| What it costs | A commercial interest rate plus fees, fixed and known at the start. | IRD's use of money interest on the unpaid tax, at a rate IRD sets, and penalties may still apply. |
| How you get it | Apply to a lender through us. | Agree it directly with IRD, through myIR or by phone. |
| Flexibility | Fixed term, fixed repayment. | Set by IRD. Missing payments can end the arrangement. |
| Best for | A viable business that wants the debt paid now, or cannot get the terms it needs from IRD. | A business IRD is willing to give time to, on terms it can meet. |
General information only. Check instalment arrangement eligibility on ird.govt.nz or with IRD, and ask your accountant to compare the two before you decide.
What to do before you apply
- Check myIR so you have the exact balance, including any penalties and interest, not an estimate.
- File any outstanding returns, even if you cannot pay yet. Most lenders accept an unpaid but filed position; very few accept unfiled.
- Look at an IRD instalment arrangement first and ask your accountant to compare it with the cost of a loan.
- If PAYE or KiwiSaver deductions are part of the balance, say so. Lenders and IRD both treat payroll deductions seriously.
FAQ
IRD Tax Debt Loans questions
Will IRD know I borrowed to pay them?
What is an IRD instalment arrangement?
Is a loan cheaper than an instalment arrangement?
Which taxes can I fund?
Do I need to be up to date with my returns?
What if I already have an IRD instalment arrangement?
Do all lenders fund tax debt?
What if my business is not viable?
A person reads this, not a scoring engine
A named advisor takes your file to the lenders on the panel that fund your industry and your turnover, and tells you plainly when an IRD tax debt loan is the wrong answer and what to use instead.
Ready when you are
Compare IRD Tax Debt Loans today
Comparing is free, you’re never locked in, and checking won’t affect your credit score. If we can’t help, we’ll tell you that too.
