By Mary Madigan
Bree Armstrong, 27, owns The Beauty Hub, a beauty business with two locations in Queensland and Victoria.
Ms Armstrong explained that, in order to grow her business, she needed to go into debt to make it happen.
Speaking to news.com.au, she revealed that she made the decision to spend over $150,000 on the fit-out of her new salon.
鈥淚 moved into a larger place and I spent my tax savings on renovations because it was easier to get into debt with the ATO than get a loan,鈥 she said.
鈥淲hen I was doing the renovations I found out you could go on a payment plan with the ATO so I wouldn鈥檛 have to pay my taxes upfront.鈥
MORE: Aussie tax secrets revealed
At the time, it seemed like the perfect solution, but in reality the consequences were hard to live with.
鈥淚 was like 鈥榩erfect that means the $40,000 I have in savings for my tax bill I can use for my renovations and I can just pay the tax bill off鈥,鈥 she explained.
鈥淚 didn鈥檛 see it as a bad move at the time. Little did I know that was the worst financial move I could ever make.鈥
Ms Armstrong didn鈥檛 just use the $40,000 she had saved to give to the tax office, she also used $50,000 from her personal savings and borrowed $85,000 off someone close to her to cover other business expenses.
She quickly figured out that being in that much debt was really tough to keep up with. She was juggling the ATO payment plan and the debt to her close friend, which she was paying back in $500 instalments.
鈥淚 was always anxious because I always had the money coming out, regardless how much money I made at the salon, I always had to pay the debt,鈥 she said.
鈥淲e have such huge overheads just to pay my debt.鈥
Do you have a tax debt story? mary.madigan@news.com.au
It was challenging, and it affected her personally because she couldn鈥檛 take out any other loans, such as to buy a car or get a mortgage.
鈥淚 have spent endless tears crying over the number of times I鈥檝e been bumped back for things,鈥 she said.
The young business owner explained that she never thought getting herself into tax debt was an easy option but just the most practical.
What she didn鈥檛 comprehend is that, if you have a tax debt, it becomes increasingly hard to borrow more money.
鈥淵ou can鈥檛 get a loan if you鈥檙e in debt to the ATO,鈥 she said.
Ms Armstrong is only now turning a financial corner because she鈥檚 paid back the bulk of both debts.
鈥淚鈥檝e had myself in so much debt to the point that me getting my first car loan is the first ever loan I鈥檝e ever been approved for,鈥 she said.
For the past five years, the business owner feels as if she has been chasing her own tail, but, ultimately, she believes it was worth it.
鈥淚f I hadn鈥檛 gotten into that debt I wouldn’t be where I am today,鈥 she said.
鈥淚f you were just to start out small and be on your own you could easily do it with no debt but for me I made one big jump at once and I needed extra money to make that jump.鈥
Even though Ms Armstrong certainly wouldn鈥檛 do everything the same if she had the chance to do it over, she doesn鈥檛 have regrets.
The $100,000 investment has allowed her to create a great place for, not just her clients, but her workers.
鈥淚t has created a space that people love coming too and they feel comfortable and welcome,鈥 she said.
As for her relationship with debt? Well she鈥檚 open to getting into more debt if it is for the right reason.