10/03/2026
There's deductions, then There's deductions.
Quick tax tip a lot of business owners miss.
There’s a big difference between cash deductions and non-cash deductions when it comes to tax… and it can seriously impact your borrowing capacity.
Cash deductions are real expenses.
Things like fuel, repairs, subscriptions, wages, or anything else you actually pay for. They reduce your taxable income, but they also reduce your net profit. And when it comes to lending, that lower profit can reduce how much you can borrow.
This is where people get it wrong.
Trying to load up on expenses just to pay less tax can actually hurt your ability to get finance.
Non-cash deductions are different.
A good example is depreciation on vehicles or equipment used in your business. The ATO allows you to claim the decline in value of that asset over time.
That means your taxable income goes down, but there’s no extra cash expense hitting your business that year.
From a lending perspective, depreciation is usually added back to your income, so it generally doesn’t reduce your borrowing capacity the way cash expenses do.
Smart operators don’t just focus on paying less tax.
They focus on structuring their finances so they can still access funding when they need it.
That’s the strategy piece most people miss.
