A Lifeline for Viable Businesses in Financial Distress
Small Business Restructuring (SBR) is a formal insolvency process designed to help Australian businesses manage debt without giving up control.
Introduced in January 2021 as part of insolvency law reforms, the SBR framework provides a simplified, cost-effective alternative to voluntary administration. If your business meets the SBR criteria, you could benefit from retaining control, avoiding liquidation and achieving better returns for creditors.
At HLB Mann Judd Insolvency WA, our business restructuring services guide owners, directors and their accountants through the entire SBR process. If you would like to speak with a registered small business restructuring practitioner, you can contact us on 08 9215 7900.
Why Do Companies Restructure?
A small business may choose to restructure for a variety of financial or operational reasons, often as a way to address financial distress while remaining in control of the business.
Restructuring can prove a valuable opportunity to reduce debt, renegotiate with creditors and improve cash flow. Common reasons for restructuring include:
Short-term cash flow issues or mounting debt
Reduced revenue due to changing market conditions
Pressure from creditors or legal demands
The need to streamline operations and cut costs
When a small business restructures, it is able to continue trading whilst addressing any financial pressure. This protects jobs, supplier relationships and the value of the business to stakeholders.
SBR Eligibility Criteria
To be eligible for a small business restructure, a company must meet all of the following requirements:
Be insolvent or likely to become insolvent
Have total liabilities of less than $1 million, including secured and unsecured debts
Have not undergone an SBR or simplified liquidation in the past 7 years (for the company or its directors)
Be up to date with all ATO lodgements (e.g., BAS, PAYG) and employee entitlements (e.g., superannuation, wages)
A small business restructuring practitioner must confirm the company’s eligibility before the process can begin.
What Is the Small Business Restructuring Process?
The SBR process allows a company to develop a restructuring plan to compromise and repay debts over time. Unlike other formal insolvency procedures, the directors remain in control of the business throughout the process while a registered restructuring practitioner (similar to a liquidator) oversees the plan and advises on its viability.
Once the plan is developed, it is presented to creditors for a vote. If approved by a majority in value, the plan becomes binding on all unsecured creditors. The company continues to trade and repay debts according to the agreed terms.
The Timeline
The SBR process follows a strict and efficient timeline:
Day 0 – Directors appoint a registered restructuring practitioner
Within 5 business days – Practitioner confirms eligibility and notifies creditors
Within 20 business days – Company prepares and submits a restructuring plan
Day 20–25 – Plan is sent to creditors, along with a declaration from directors and the practitioner’s report
Within 15 business days of receipt – Creditors vote to accept or reject the plan
If accepted, the plan is implemented under the practitioner’s supervision, and the company continues operating with reduced debt obligations.
How Can Restructuring Debt Benefit Your Small Business?
- Directors remain in control of the business
- Avoids liquidation and maintains goodwill
- Streamlined and cost-effective compared to voluntary administration
- Creditor enforcement is paused during the proposal period
- Better returns for creditors and survival prospects for the business
How HLB Mann Judd Insolvency WA Can Help
We work closely with directors, accountants and legal advisors to help small businesses restructure.
Our practitioners offer business restructuring services that include:
Confirming company eligibility and solvency reviews
Liaising with the ATO and key creditors
Drafting the restructuring plan and preparing financial disclosures
Coordinating the creditor voting process
Supporting directors post-approval with plan implementation
In addition, we can also provide your staff with Perth based SBR training.
Enquire Today and Take Control of Your Financial Future
If your business is facing financial pressure but remains viable, small business restructuring could offer the breathing room you need to reset and recover.
If you are looking to restructure your business and would like advice, you can contact our Perth office 08 9215 7900 or click here.
