Understanding the Small Business Restructuring Process

A Clear Path to Financial Recovery for Your Business

The Small Business Restructuring Process (SBRP) is a government-backed initiative that provides small businesses facing financial difficulties with a clear path to restructure their debts while remaining in control of their operations. This process offers a lifeline to businesses in distress, allowing them to avoid liquidation and continue trading as they work toward financial recovery.

This page will guide you through each step of the process, helping you understand how the SBRP can benefit your business and relieve your financial stress. By following this structured approach, you can reduce your debt burden and rebuild your business with confidence.

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How the Small Business Restructuring Process Works

The Small Business Restructuring Process (SBRP) is designed to provide a streamlined and accessible way for small businesses to manage their debts and get back on track. Here’s how the process works, step by step:

Qualification Check

Before beginning the restructuring process, your business must meet the eligibility criteria set by the Australian Government. This includes having liabilities of less than $1 million, being up to date on tax lodgements, and having paid all employee entitlements. To confirm you qualify, you can take our quick Qualification Test or review the Eligibility page for more information.

Appoint a Restructuring Practitioner

Once your business is confirmed as eligible, the next step is to appoint a Small Business Restructuring Practitioner (SBRP). This licensed professional will work with you to assess your business’s financial situation and help develop a plan to manage your debts. The practitioner’s role is to guide the process, ensuring the plan is fair to both the business and creditors, while keeping you in control of your company.

Develop and Submit the Restructuring Plan

With the help of your restructuring practitioner, you will develop a customised restructuring plan. This plan will outline how your business intends to repay its debts over an agreed period, while continuing to trade. Once the plan is finalised, it will be submitted to your creditors for approval. Creditors have up to 15 business days to review and vote on the proposal. If more than 50% of creditors (by value) approve the plan, it will proceed.

Implement the Restructuring Plan

Once the plan is approved, you can continue trading while following the agreed debt repayment schedule. The restructuring practitioner will oversee the implementation of the plan, ensuring that payments to creditors are made according to the terms. With the plan in place, your business can focus on stabilising its finances and working toward long-term recovery.

Begin the Restructuring Process

Why Choose the Small Business Restructuring Process?

The Small Business Restructuring Process (SBRP) offers a range of benefits that make it an ideal solution for businesses facing financial distress. It’s designed to be simple, cost-effective, and supportive, allowing you to focus on recovery without losing control of your business.

Retain Control of Your Business

One of the key advantages of the SBRP is that, unlike liquidation or voluntary administration, you remain in control of your business. This means that while you restructure your debts, you can continue to trade and manage your operations.

Avoid Liquidation and Closure

By restructuring your debt through the SBRP, you can avoid the severe consequences of liquidation, which often results in the forced sale of assets and the closure of your business. The process gives you a clear path to recovery, without the risk of losing everything.

Tailored Debt Solutions

Every business is different, and the SBRP recognises this by allowing for customised restructuring plans. These plans are designed to suit your business’s unique financial situation, giving you a clear and manageable way to repay your debts over time.

Reduced Financial Stress

Facing financial distress is incredibly stressful for business owners. The SBRP provides a structured solution that can relieve immediate pressure by halting creditor actions and giving you the breathing room you need to stabilise your business.

Cost-Effective and Streamlined

The SBRP is designed to be more affordable than traditional insolvency processes like voluntary administration or liquidation. It’s a streamlined solution that reduces the cost and complexity of restructuring, making it accessible to small businesses.

FAQs About the SBR Process

How long does the Small Business Restructuring Process take?

The entire process typically takes around 35 business days. Once your business enters the restructuring process, you will have 20 business days to submit your restructuring plan to creditors. Creditors then have 15 business days to review and vote on the plan.

Can my business continue trading during the restructuring process?

Yes, one of the key benefits of the SBRP is that your business can continue trading throughout the restructuring process. Unlike other insolvency options, you retain control of your business operations while addressing your financial difficulties.

What happens if creditors don’t approve the restructuring plan?

If more than 50% of creditors (by value) vote against the restructuring plan, it will not proceed. In this case, your business may need to explore alternative solutions such as voluntary administration or liquidation. It’s important to work closely with your restructuring practitioner to develop a plan that is fair and acceptable to creditors.

Are all types of debt included in the restructuring plan?

The restructuring plan typically covers unsecured debts incurred before entering the SBRP. This includes debts owed to suppliers, creditors, and the ATO. Secured creditors and certain liabilities, such as employee entitlements and new debts incurred after the process begins, are not included in the restructuring plan.

What is the role of the Small Business Restructuring Practitioner?

The restructuring practitioner works with you to develop your restructuring plan and submits it to creditors for approval. They oversee the process, ensuring it complies with legal requirements and that the plan is fair to all parties involved, but you remain in control of the day-to-day running of your business.

What if my business can't meet the terms of the restructuring plan?

If your business is unable to meet the terms set out in the restructuring plan, the plan may be terminated, and creditors will regain the right to pursue their claims. In such cases, your business may need to explore other insolvency options, such as voluntary administration or liquidation. It’s important to monitor your progress closely and work with your restructuring practitioner to adjust your strategy if needed.

Ready to Begin the Restructuring Process?

Taking the first step toward financial recovery is crucial for your business’s future. The Small Business Restructuring Process is a powerful tool that can help you regain control, reduce your debts, and secure your long-term success.

Check If You Qualify Now

If your business is struggling with financial difficulties, don’t wait. Find out if you qualify for the Small Business Restructuring Process and take control of your financial future.

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Talk to a Specialist

Unsure about the next steps? Our team is here to help. Contact us today for a confidential consultation and find out how the restructuring process can benefit your business.

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