Can I use a line of credit to pay the ATO, BAS and suppliers?
Yes, and right now it might be the smartest money move your business makes this year. With super due every payday, the ATO dropping credit cards after 30 November and ATO interest now costing full price, a business line of credit gives you back the cash-flow buffer those changes took away.
Short answer: yes, and right now it might be the smartest money move your business makes this year. Three government changes have landed one after another, and each one takes away a cash-flow buffer you probably relied on without even thinking about it. A business line of credit puts that buffer straight back. Here is how it works, why it matters right now, and how easily we can get one in place for you.
Can I use a line of credit to pay the ATO, BAS and suppliers?
Short answer: yes. A business line of credit is an approved limit you draw on whenever a bill lands: your BAS, an ATO balance or a big supplier run. Pay the ATO by BPAY or bank transfer, get the bill paid on time, then pay the facility back down as your customers pay you. Interest generally applies only to what you use.
It is the breathing room every business owner wishes they had. No lump sum, no interest on money sitting idle. Just a limit that is there when the bill arrives and resets when you pay it back.
Lumpy bills are exactly what it is built for. The quarterly BAS. The tax bill after year end. The supplier run before the big job pays out. Already carrying an ATO balance? A facility can clear it so the interest stops compounding, and our guide on paying ATO debt now credit cards are ending shows why that is often the smarter move.
Why is everyone suddenly talking about a line of credit?
Short answer: because the buffers are disappearing. Super moved to every payday on 1 July 2026. The ATO stops taking credit cards after 30 November 2026. And ATO interest compounds daily at 11.51% with no tax deduction. Three changes, one result: less breathing room. A line of credit gives it back.
We will be honest, it has been a rough run for business owners. Any one of these changes is manageable. All three together squeeze cash flow from every side.
The super float is gone
Under Payday Super, super now has to be paid with wages and reach each fund within 7 business days. It used to be quarterly, and that gap quietly worked as a float. Not anymore.
The card float is going
Pay the ATO on the card, clear it a few weeks later. Plenty of owners did exactly that. The ATO will stop accepting credit cards after 30 November 2026, and card payments after that date will simply fail.
Late tax now costs full price
The general interest charge is 11.51% a year for October to December 2026, it compounds daily, and you can’t claim it at tax time. Letting a BAS bill slide has never been dearer.
The card was never really the point. The buffer was. A line of credit gives your business that buffer back, on terms built for business.
How does a line of credit stack up against a credit card or an ATO payment plan?
Short answer: the card stops working for the ATO after 30 November, and a payment plan leaves non-deductible interest compounding every day. A line of credit pays the bill on time, lets you repay on your own schedule, and the interest may be tax deductible. That is a very different position to be in.
Three ways to cover a BAS or ATO bill
| Feature | Credit card | ATO payment plan | Business line of credit |
|---|---|---|---|
| Pays the ATO after 30 November 2026? | No. The ATO stops accepting credit cards after that date. | The debt stays with the ATO until it is paid off. | Yes, by BPAY or bank transfer, with the bill paid on time. |
| How interest works | Set by the card provider on the outstanding balance. | GIC of 11.51% a year for October to December 2026, compounding daily. | Set by the lender, generally on the amount drawn only. |
| Tax deductibility of the interest | Depends on business use. Your accountant confirms it. | Not deductible if incurred on or after 1 July 2025. | May be deductible where the business borrows for business purposes. Your accountant confirms it. |
| Repayments | Minimum monthly repayments on the balance. | Instalments agreed with the ATO. | Repay and redraw as cash flow allows, within the facility terms. |
On tax, the ATO’s own long-standing ruling allows a business that borrows to pay its tax, in connection with running that business, to generally deduct the interest. Supplier payments are ordinary business expenses anyway. The facility just needs to sit in the right entity, so we line it up with your accountant’s advice.
How hard is it to get a line of credit?
Short answer: not hard at all, and we do the heavy lifting. For established businesses, many facilities across our 60+ lender panel can be assessed on business bank statements, so there is no waiting on your accountant for a full set of financials. Newer businesses have options too. We work with business owners at every stage.
You tell us what your business needs. We compare the panel, sort the paperwork and keep the whole thing moving. No chasing, no guesswork, no applying to five lenders and hoping one says yes.
If you have passed your first year, our guide to a business loan with 12 months trading explains why that milestone opens so many doors. And if your books are running behind, a business loan using bank statements works on the same principle. Facilities can be unsecured for speed and simplicity, or secured against property for a bigger limit and sharper pricing.
When will my first BAS without a credit card be due?
Short answer: for quarterly lodgers, the October to December BAS is due on 28 February, so it will be the first quarterly BAS most businesses pay without the card. Monthly lodgers feel it sooner, with the November BAS due on 21 December. Set up a line of credit now and it is ready well before either.
Both dates come straight from the ATO’s BAS due dates, and the February one already includes a built-in extension, so there is no extra time on top. If the plan was to pop that BAS on the card as usual, now is the moment to sort the alternative, not the last week of February.
How quickly can you set up a line of credit for my business?
Short answer: quicker than most owners expect, because we take care of it. One conversation to understand your business, we compare the panel, then we handle the application from start to finish. Get it sorted now and the limit is sitting there, untouched, the moment your next BAS or supplier bill lands.
- Have a chat. Tell us about your business, your bills and any ATO balance.
- We compare the panel. We match you with the facilities across our 60+ lenders that suit how your business runs.
- We handle the application. We sort the paperwork and keep it moving, so you can keep running your business.
- Your buffer is ready. The limit sits there for whenever you need it.
From the broker’s desk: the best time to set up a line of credit is when you don’t need it. Arranged in a calm month, it is an easy conversation. Arranged the week a BAS is due, it is a scramble. Get the limit in place now and it is one less thing to think about.
These changes are frustrating, and you have every right to feel that way. The good news is the fix is simple, and once it is in place a line of credit gives you more control than the card ever did. We are WA based, help business owners right across Australia, and do it all remotely, so it starts with one phone call. Whatever stage your business is at, have a chat with us and let’s get your buffer back.
About Pilbara Finance
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Start with a chatThis guide is general information for the Australian market, not advice about your situation. Lender credit policy changes, and what applies to you depends on your circumstances. Pilbara Finance is a credit representative (478535) of Mortgage Specialists Pty Ltd, Australian Credit Licence 387025.