Author
Marcus PetrovicDirector & Head of Client Strategy
In this episode of the MG Academy Podcast, Marcus Petrovic sits down with Julian Fayad, Founder and CEO of LoanOptions.ai, to unpack how the ATO's hardened stance is pushing business owners towards brokers and non-bank lenders, why AI is reshaping how finance is accessed, and what brokers, accountants and advisers need to understand about restructuring options before their clients run out of time.
Why business owners are going to brokers instead of accountants
Julian notes a significant shift in where distressed business owners are turning for help. Traditionally, someone with a tax debt would approach their accountant or lawyer first. Now, an increasing number are going straight to their broker. The reason is simple: the major banks have effectively abandoned them. A business owner with an imperfect ATO position is treated, as Julian puts it, like a leper by the big four banks, regardless of their trading history or cash flow.
Brokers now hold 76.8% market share in Australian property lending, and they have access to fintech lenders, non-banks and private lenders that are far more flexible when it comes to funding ATO debt. These products may not be the cheapest option available, but they provide a solution at a time when the alternative is enforcement action or liquidation.
The ATO's changed approach and what it means
Since 1 July, general interest charges on late tax bills are no longer tax deductible. Julian sees this as the ATO effectively saying it will no longer act as a bank. The message to business owners is clear: go and get debt from somewhere else. The ATO wants its money up front and in full, and it is outsourcing the risk to the private lending market.
Marcus adds context from the front line. During COVID, from roughly 2020 to 2023, getting a payment arrangement from the ATO was straightforward. The ATO was preserving jobs and giving businesses space to survive. That period created a false sense of security. Business owners accumulated debt believing the lenient approach would continue. Then the ATO flipped the switch, demanding repayment within 28 days of debts that had built up over 18 months. For many, it was and still is impossible to meet.
Director Penalty Notices and the 21 day window
The conversation turns to one of the most misunderstood areas of tax debt: Director Penalty Notices. Marcus is blunt about what he is seeing. People are receiving DPNs and being advised by well meaning but uninformed advisers to simply enter into a payment arrangement with the ATO. But a payment arrangement does not extinguish the director's personal liability under a DPN.
If a DPN is issued and you have lodged on time, you have 21 days to take one of four actions: pay the debt in full, appoint a Small Business Restructuring practitioner, appoint a liquidator, or appoint a voluntary administrator. Entering into a payment arrangement is not one of those four options. If the payment arrangement later fails, the director is personally liable for the full amount. If lodgements were late, it becomes a lockdown DPN and the personal liability is already locked in regardless.
Marcus stresses that business owners need to update their personal address on the ASIC register. DPNs are sent to the address on file. Telling the ATO it was sent to an old address is not a defence.
How Small Business Restructuring and finance work together
Julian and Marcus discuss a practical pathway that combines restructuring with non-bank lending. To qualify for an SBR, a company's employee entitlements, including superannuation, need to be up to date. Julian's panel includes lenders who will provide finance specifically to bring those entitlements current so the business can enter into the SBR process.
Once the restructure is in place, the debt is crystallised, interest stops accruing, and the business can propose a cents in the dollar return to creditors, typically 20 to 30 cents, paid over a manageable period.
Marcus makes an important point about what happens after the SBR is completed. The proposal report that goes to creditors is not a black mark. It is actually a document that can be presented to future lenders as evidence that the business has addressed its problems, restructured its debt and is now trading on a sound footing. Brokers who are telling clients not to do an SBR because they will never get finance again are wrong, and Marcus suggests those clients find a different broker.
AI, brokers and what is coming
Julian predicts that within three to five years, 80% of straightforward lending deals will be handled by AI. That does not mean brokers are becoming obsolete. It means the vanilla, rate and fee comparison work that a computer can do faster and more accurately will be automated.
What remains, and where human brokers become more valuable, is the complex, exception driven work: distressed debt, restructured businesses, non-standard lending scenarios. The brokers who build their practices around solving difficult problems will thrive. Those who have built their entire model on processing simple deals are at risk.
Julian also raises a practical warning about AI tools. Brokers who are copying and pasting client data into free consumer versions of ChatGPT or similar tools are exposing that data to model training. Any firm using AI for client work needs to be on an enterprise version with proper data retention policies in place.
The bottom line: communicate and act early
The consistent message from both Marcus and Julian is that communication is everything. The ATO wants interaction. Lenders want communication. Silence triggers enforcement. If you are in trouble, lodge your BAS on time even if you cannot pay the full amount. Pick up the phone to the ATO. Talk to your broker or lender before you miss a payment, not after. And if your accountant is only doing year end returns for $1,600 and you have a six figure tax debt, you have outgrown that accountant.
A restructure is not a failure. It is a recognition that your financial circumstances have changed and you want to get the best possible outcome for your creditors while keeping the business alive. The alternative, liquidation with zero return to creditors, serves nobody.
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