December 9, 2025
Banks across Aotearoa New Zealand are increasingly hesitant to lend to businesses that have unpaid tax — even if they’re on an IRD payment plan. In the current climate of tighter enforcement and rising business failures, tax arrears are seen as a major warning sign.
Payment plans are not “being up to date.” Banks see them as a sign you’ve fallen behind, not that the problem is solved.
Tax arrears suggest cash-flow stress or poor financial management. If tax hasn’t been paid on time, lenders question whether new loan repayments will be any different.
Banks fear forced liquidation. IRD is now more active in chasing overdue debt, increasing the risk that enforcement could shut your business down — taking the bank’s money with it.
It damages lender confidence. Overdue tax makes financial statements look less reliable and raises doubts about how well the business is being run.
Because of this, many banks — and even alternative lenders — will decline an application outright until tax is fully paid.
Schedule IRD payments for times when cash flow is strongest.
Set up an overdraft as a safety buffer.
Move GST into a separate account as soon as income arrives.
Pay PAYE when you file it — don’t wait.
Put aside small amounts regularly for provisional and income tax.
