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Self-Employed Debt Consolidation

Six debts into one home loan for a concreting business, with the tax debt cleared and the cashflow reset around a single repayment.

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Self-employed debt consolidation is rarely the result of one bad decision. It is usually a run of short-term fixes that each made sense on the day. Our clients run a concreting business through a long-standing trading trust, and they came to us carrying six separate debts, including business tax debt, on cashflow that had stopped keeping up.

At Loanworx, we work with self-employed borrowers whose files do not fit a standard credit template. That means presenting income the way the business actually earns it, explaining the dishonours in their proper context, and finding the lender whose policy can take every element of the application rather than four out of five.

As an experienced finance broker, we work for you rather than for any single lender. We shape the file before it is lodged, so the answer you get reflects your business rather than a policy mismatch.

Carrying more debts than your cashflow can hold? Call us on 1300 562 696 or get in touch and we’ll be back to you shortly.

Case Snapshot

The file at a glance, before we look at how it was structured and why the lender match mattered.

Case detail Case facts
Clients Self-employed couple, concreting business
Structure Long-standing trading trust
Location Victoria
Objective Consolidation of business debts into the home loan
Debts consolidated Six, including business tax debt
Income evidence Business activity statements (BAS), low doc basis
Outcome Prime variable rate, cashflow reset
Status Settled, review scheduled in twelve months

Case details are provided as an illustration only. Approval, pricing and consolidation limits are subject to lender assessment in every case and may change.

The Situation

Concreting rises and falls with the wider economy, and Victoria has been a hard market to trade through. Bad debts climbed. Debtors stretched their payment terms further out. The work was still coming in, but the money for it was arriving late, and that gap landed squarely on the business cashflow.

To bridge it, the clients took on short-term unsecured lending. One facility became several. What began as a stopgap turned into a repayment schedule the business could not sustain, alongside an activity statement debt owed to the Australian Taxation Office (ATO).

This was not a failing business. It was a timing problem funded with expensive money. As self-employed mortgage brokers, it is a pattern we see often across trade businesses.

Self-employed concreting business reviewing debt consolidation options with a mortgage broker

The Challenge

Four pressures were compounding at once, and each one made the next harder to absorb.

01

Rising bad debts

Work invoiced and never paid does not only cost the margin on that job. It removes the cash meant to fund the next one, so the shortfall carries forward.

02

Stretching debtor payments

Longer terms across the debtor book widened the gap between paying suppliers and wages now, and being paid later.

03

Snowballing short-term loans

Unsecured short-term facilities are quick to draw and expensive to hold. Several running together consumed a large share of weekly takings before the business paid for anything else.

04

Compounding tax debt

Since 1 July 2025, the general interest charge the ATO applies to unpaid tax debt is no longer tax deductible. Carrying an activity statement debt now costs more in real terms than it did under the previous rules, which changed the arithmetic on leaving it in place.

The Lender Brief

The plan was to fold the business debts into the home loan and give the cashflow room to move. That meant finding a lender who could accept every element of the file, not four out of five.

01

Clearing business tax debt

Many lenders will not release funds to pay an ATO liability at all, which rules them out before serviceability is even reached.

02

Consolidating up to six debts

Consolidation limits are set by policy, and a cap of three or four is common. Six needed a lender whose policy went that far.

03

Offering competitive variable pricing

A consolidation that fixes the structure but punishes the rate only moves the problem. The rate had to be one the business could carry.

04

Reading sporadic dishonours in context

The dishonours sat on the very debts being consolidated. They were a symptom of the timing problem, not a separate credit issue, and the lender had to assess them that way.

05

Accepting low doc income at prime rates

With financials that did not yet reflect current trading, income had to be verified through BAS. A low doc assessment at a prime variable rate, rather than a specialist rate, was the difference between a workable outcome and an expensive one.

The Solution

We mapped the debts, the trust structure and the BAS income into one position a credit assessor could read in a single pass, then matched it to a lender whose policy covered all five requirements.

The consolidation rolled in the ATO activity statement debt, the short-term unsecured facilities, the car finance and cash out for home renovations, and the dishonours were presented against the debts they came from.

Broker structuring a self-employed debt consolidation file for lender assessment

The Result

The file was approved on a low doc basis using BAS income, at a prime variable rate.

One repayment in place of six

Six debts were consolidated into a single home loan repayment, with cashflow projections reset around one repayment date.

ATO debt cleared in full

The activity statement debt was paid out at settlement, removing a liability that had become more expensive to carry under the current interest charge rules.

Prime pricing on a low doc file

Income was assessed on BAS rather than lagging financials, and the loan was priced at a prime variable rate rather than a specialist one.

The clients returned to trading normally, with one repayment in place of six. This is what a self-employed home loan can do when the lender is matched to the file rather than the file squeezed into the lender. Approval, pricing and consolidation limits remain subject to lender assessment in every case.

What Happens Next

We will check in with the clients over the next twelve months to see how the business is tracking. Once trading has stabilised and the financials catch up, the intention is to refinance to a full doc lender at prime pricing, subject to their position and lender policy at the time.

A low doc home loan was the right instrument for this moment, not a permanent destination. Trust structures add a further layer to any application, from how a lender treats property held in trust to why some decline a complex structure mortgage.

Twelve month review timeline for refinancing a low doc loan to a full doc lender

Cashflow Pressure Does Not Have to Cost You the Rate

If your short-term debts have stacked up and the ATO balance is still sitting there, the file in front of you probably looks worse than your business actually is. That distinction is invisible on a credit form and obvious to a broker who knows which lender reads a trade business fairly.

The fix is getting the file in front of the right lender, with the income presented properly. Loanworx Group does that work before an application is lodged, so the answer you get reflects your business rather than a policy mismatch.

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Approval, rates, fees and consolidation limits are subject to lender assessment and may change. This is general information only and does not account for your objectives, financial situation or needs. Consider advice from your accountant, solicitor or financial adviser first.