I still have a HELP debt. Will it stop me getting a business loan?

Mr says: a HELP debt almost never stops a business loan by itself. It doesn’t sit on your credit report, it can’t be “defaulted on” the way a car loan can, and most business lenders look at the business first. Where it does matter is your personal cash: it quietly takes a slice of your income every year, and for sole traders that slice arrives as a lump at tax time.

Mr gets this question a lot from owners in their late twenties and thirties. You did the degree, you worked in someone else’s practice or kitchen or studio for a few years, and now you’ve got your own ABN and a plan. Somewhere in the back of your mind is that HELP balance from uni, and you’re wondering whether a lender will hold it against you.

Short version: probably not much. Longer version below, because how much depends on how your business is set up.

Is a HELP debt like any other debt in a lender’s eyes?

No, and that’s the good news.

A normal debt has a fixed repayment you must make whatever happens. Miss it and the lender can chase you, list a default and eventually take security. A HELP debt works differently:

• No fixed repayment. What you repay each year is set by your income, not by your balance.
• No repayment below the threshold. Earn under the minimum and there’s nothing compulsory to pay that year.
• No credit listing. It’s collected through the tax system, so it doesn’t appear on your credit report.
• No security. Nobody can take your ute or your house over it.

That’s why APRA has said HELP repayments are better understood as tied to income than to the size of the debt, and has taken HELP out of the debt-to-income measure banks report for home lending (APRA response to consultation).

So a lender isn’t going to look at a $38k HELP balance the way it would look at a $38k personal loan. It’s a cost against your income, not a liability waiting to blow up.

What do the repayments look like right now?

Two big changes landed in 2025, and plenty of owners haven’t caught up with either.

The 20% cut. Study and training loans that existed on 1 June 2025 were reduced by 20%, with the reduction applied before that year’s indexation. The ATO says it has now finished processing these reductions (ATO what’s new). If you haven’t checked your balance since, it’s probably lower than you think.

The new marginal system. From the 2025–26 income year, compulsory repayments only kick in once your repayment income passes $67,000, and you only repay on the part above that. The ATO’s table for 2025–26 looks like this (ATO thresholds and rates):

Repayment income (2025–26)	Compulsory repayment
$0 – $67,000	Nil
$67,001 – $125,000	15c for each $1 over $67,000
$125,001 – $179,285	$8,700 plus 17c for each $1 over $125,000
$179,286 and over	10% of total repayment income

Thresholds are indexed each year, so check the current table before you budget for 2026–27.

One catch worth knowing: repayment income isn’t just taxable income. It adds back things like net rental losses, reportable super contributions and reportable fringe benefits. Owners who’ve reduced their taxable income with a negatively geared property or extra super can be surprised by the HELP figure on their assessment.

Why do sole traders feel it most?

Because there’s no employer taking it out each fortnight.

If you’re on wages, you tell your employer about your loan and extra tax is withheld from every pay. When you’re a sole trader, there’s usually nobody doing that. The ATO works out your compulsory repayment after you lodge and adds it to your notice of assessment (ATO compulsory repayments). It lands as one amount, on top of your income tax, often in the same few months as a BAS.

For a sole trader, the business profit is your income. So the HELP repayment comes straight out of the money the business generated. A lender reading a sole trader’s file will see it in two places:

1. Your notice of assessment. A bigger tax bill than your profit alone would suggest.
2. Your bank statements. A large payment to the ATO around assessment time, or an ATO balance carried over if you didn’t pay it.

That second one is where owners trip up. An unpaid HELP repayment becomes part of your ATO balance, and an ATO debt is something lenders do ask about. If that’s you, have a read of Can I get a business loan with an ATO debt? before you apply.

Mr’s take on how lenders read sole traders generally is in the sole trader business loan guide.

Want a real person to look at how your HELP debt and your trading fit together? Ask Mr whether you qualify. Enquiring doesn’t involve a credit check.

What if my business is a company or trust?

Then HELP sits further back in the picture.

When a company or trust borrows, the lender assesses the business: its bank statements, turnover, existing debts and, for bigger loans, its financials. Your HELP debt belongs to you, not the company. It only shows up when the lender looks at you personally, which usually happens because you’re giving a guarantee. Mr explains what that involves in Do I need a personal guarantee?.

If you pay yourself a wage through the company, the HELP withholding comes out of your pay like any other employee’s. That keeps it tidy: the company’s cash flow isn’t touched, and your personal tax return shows the HELP repayment already handled.

Does it reduce how much I can borrow?

Sometimes, a little. Rarely a lot.

It depends on what kind of loan it is and how the lender sizes it:

• Unsecured loans and lines of credit are usually sized on the business’s turnover and bank statements. Your personal HELP repayment often barely registers here, especially for a company borrower.
• Property-secured business loans lean heavily on the security and on a sensible way out of the loan. HELP is a minor line in the personal side of the file.
• Bank-style loans with a full personal servicing check may treat your HELP repayment as a cost against your income, which can trim your borrowing power for sole traders and partners.

The APRA change that let banks ignore HELP repayments for borrowers who’ll repay within about 12 months is a home loan rule for banks (APRA). Don’t assume a business lender will apply the same treatment. Some will be more relaxed than a bank, some will simply include it, and many won’t focus on it at all.

For the bigger picture, see how much can my business borrow?.

A worked example: two owners, same profit

This is an illustration with made-up numbers, not a real client.

Two physiotherapists in Adelaide each make about $110,000 a year from their practices and each still owe around $30,000 in HELP.

Jess is a sole trader. Her repayment income is about $110,000 in 2025–26, so her compulsory repayment is 15c on the $43,000 above the threshold: $6,450. Nobody withholds it. It turns up on her notice of assessment next to her income tax, and in her first year she hadn’t set it aside, so it went onto a payment plan with the ATO. When she applies for a $60k loan to fit out a second treatment room, the lender sees an ATO payment arrangement and asks for the story.

Tom runs his practice through a company and pays himself an $85,000 wage. His HELP withholding comes out of each pay, adding up to about $2,700 for the year (15c on the $18,000 above the threshold). The rest of the profit stays in the company. When he applies for the same $60k, the lender assesses the company’s trading. His HELP debt shows up only in his personal tax return as a guarantor, already paid.

Neither of them is likely to be declined because of HELP. But Jess has more explaining to do, and the explaining isn’t really about HELP at all. It’s about the ATO arrangement that came from not planning for it.

How do I present a HELP debt to a lender?

Mr’s rule of thumb: lenders hate surprises far more than they hate small debts. So:

1. Mention it upfront. List it with your other personal commitments, with the current balance from myGov. It takes one line.
2. Check your real balance. After the 20% cut, it may be noticeably smaller than the figure in your head.
3. Show the ATO is square. If your last assessment included a HELP repayment, have proof it was paid, or show your payment plan is up to date.
4. Set aside monthly. Sole traders, put a slice of every month’s profit into a tax account for income tax and HELP. Your bank statements will thank you.
5. Don’t drain the business to pay it off. Clearing HELP early with money the business needs can make your file look thinner, not stronger.

Not sure what else a lender will want to see? The loan-readiness interview walks you through it, and what do lenders look at first? explains the order they read things in.

Is it true that you can’t borrow until HELP is paid off?

No. That’s a myth Mr hears from younger owners all the time, usually second-hand from someone who was told it about a home loan years ago.

Plenty of business owners borrow with a HELP balance. What lenders want is a business that’s trading, a sensible amount for a clear purpose, a tidy ATO position and an honest application. A HELP debt doesn’t change any of that. If you’re just starting out, the bigger question is usually how long you’ve been trading; can a new business get a loan? covers that.

Paid for the degree, now building the business?

You backed yourself once by studying, and you’re backing yourself again by going out on your own. A leftover HELP balance is part of that story, not a reason to hold off on the fit-out, the equipment or the buffer your business needs.

If you’d like to know where you stand, the enquiry takes about 60 seconds and there’s no credit check when you first enquire. Mr doesn’t send your details out to a pile of lenders, so you won’t spend next week fielding calls from strangers. A real person reads what you’ve told us, looks at your particular setup, whether that’s a sole trader, a company or a trust, and calls you to talk it through. Please fill the form in accurately, including your structure, turnover and any ATO balance, so we can line up the right option the first time.

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