Business Loans for Tax Bills: How to Get Funding for IRS Payments

If you think you pay too much in taxes, then you’re not alone. 52% of small business owners feel the same way. That’s why many small business owners seek funding elsewhere—through business loans for tax bills.

For 2016, the IRS estimated that accountants and small business owners spent $147 billion of their time simply complying with business income tax laws. That’s a lot.

Nonetheless, your business should prioritize paying tax and IRS bills punctually. If you don’t, or you fail to pay your taxes in full, then you might have even more fines on your hands. Not to mention, avoiding tax bills can put your business or personal credit at risk.

So, what are the best ways to get the long-term business loan you need to make IRS payments?

business loans for tax bills

The Best Business Loans for Tax Bills

Even if you have extra cash lying around, it’s not always a good idea to use it to pay the IRS outright. 

If your business is growing, then strategically managing working capital to pay employees, ramp up marketing, and cover operating expenses is crucial. Business loans for tax bills help you to cover these necessary expenses, while also taking care of your IRS payments.

The best long-term loan can vary quite a bit, depending on your business. These are the most common ways that your business can get back on track by paying the IRS, and shifting gears to grow.

1. Opening an IRS Payment Plan

One of the most basic ways to better manage your IRS payments is by opening a payment plan. This option may make sense for your business if you simply need a little more time to pay off your taxes or fines. 

IRS payment plans allow you to pay back your taxes on an extended timetable. Rather than taking out an additional loan, you’ll have to rely on your working capital to make these payments.

While short-term plans (less than 120 days) are available to individuals, only long-term plans are available to businesses. This does include a minor setup fee, but when you consider the amount of money that you’re saving on a fine, it can be quite significant. Payment plans for less than $25K can be done online, whereas loans over $25K require a mail-in process.

The details of your payment plans can vary based on your individual situation.

However, you would still have to pay interest on the unpaid amount.

2. Bank Loan

Some business owners choose to finance IRS payments with bank loans. While bank loans might have the lowest interest rates available, applying through a bank comes with a fair amount of strings attached.

First, you’ll have to consider the difficulty in qualifying. Banks can only offer low interest rates because they thoroughly vet each business before issuing an approval. The application process is generally time and effort-intensive, requiring a lot of legwork on your part.

When you don’t have a pristine credit score, your chances to qualify are even lower. Often, banks can take several months to even reply to your request.

Bank loans normally aren’t the best business loans for tax bills, unless you anticipate this need well in advance with sky-high credit.

3. Business Line of Credit

As we mentioned earlier, your business likely isn’t only stressing about IRS payments. In actuality, most businesses are juggling plenty of other payments, too.

In these cases, business lines of credit can be the best option. Although they’re not technically business loans for tax bills, these financing options give you the money you need to address any needs. Based on your business, you’ll be approved for a set amount. As you go, you can gradually draw more. More funding will become available as you pay it back, and you’ll only be charged based on the amount you use.

In short, business lines of credit give your company the cash you need to cover IRS payments, and invest in growth. If you’ve been looking for funding to take things to the next level, then this may be the way to go.

4. Purchase Order Financing and Invoice Factoring

Purchase order financing allows you to sell an outstanding invoice—which a customer owes you payment for—to a lender. Instead of sending payment to you, your customer would pay the lender directly. They’ll generally only issue part of the invoice as payment, because a portion accounts for interest.

If your business receives most payments through monthly invoices and purchase orders, then this option may make sense. The qualification and funding process is also simple and stress-free.

5. Term Loans

Straightforward term loans, through which you can withdraw a set amount of money and pay back a fixed interest rate, may be your best option. However, if you can’t access the funding quickly, then you’ll run into even more issues.

Unlike banks, fintech lenders can help you get this funding quickly and easily. Most only require the bare minimum documents, which give lenders a snapshot of your business, instead of requesting every document under the sun.

Depending on the amount you need, fintech lenders like National can find programs with terms suited for your needs. Rather than giving hard approvals and declines, fintech lenders will work with you to help you get the funding you need in the desired time window.

Applying for a Business Loan for Tax Bills: Quick, Simple and Easy!

At National, we help you get the best deal on a loan by searching within our 75+ lender marketplace. Through this process, you can quickly get the financing you need, without taking all of your valuable time away from your business.

After you apply, a Business Financing Advisor will reach out to learn more about your business before reaching out to learn more about your goals. Then, we can get started finding the right program for your business right away! It takes minimal time out of your busy day, and funds can be deposited in your account in as little as 24 hours.

Ready to get started finding a business loan for tax bills? Apply now!

National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!

About the Author, Megan Capobianco

Megan Capobianco is the Marketing Manager at National Business Capital & Services. Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.


Dislcaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital & Services and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.