Small Business Restructuring for Construction Companies — SBR for Builders & Contractors

No. SBR does not automatically cancel a QBCC licence. Licensees must still satisfy QBCC Minimum Financial Requirements (MFR) — a restructure may require a fresh MFR report from an accepted financial reporter showing the post-plan net-asset and liquidity position. Early engagement with QBCC helps protect your licence status through and beyond the plan period.

MFR assesses net tangible assets and current-ratio liquidity. A plan that reduces unsecured debt typically improves these metrics. QBCC may require a fresh MFR report during or after the plan. Model your plan's MFR impact with your accepted financial reporter before lodging an appointment — this usually strengthens the MFR position rather than weakening it.

Each state regulator has its own framework: NSW Fair Trading (home building), VBA (Victoria), Building & Energy WA, CBS South Australia, CBOS Tasmania, Access Canberra, and NT Building Practitioners Board. SBR does not automatically cancel licences in any state, but disclosure obligations usually apply and some regulators review financial fitness during the plan period. Notify the relevant regulator early and work with your practitioner on regulator-facing communications.

In most cases, yes. Directors remain in control and day-to-day operations continue. New progress claims, variations, and retentions continue to be raised and paid under contract terms. The main discipline during SBR is managing cash commitments so that post-appointment work is resourced to completion and Defects Liability Period obligations are met.

Not automatically. Most head contractors prefer a continuing subcontractor to a collapsed one — progress claims, defects liability, and rectification obligations are easier to manage with a trading entity. Review each contract for specific termination-on-insolvency clauses with your practitioner before appointment. Early, evidence-based communication (cash flow forecast, delivery plan, retention schedule) typically preserves the contract.

Historic subbie debt forms part of the plan — subbies vote on the plan by value alongside other unsecured creditors. Post-appointment work must be paid on current terms. Retentions held by head contractors remain the head contractor's property per contract and are modelled as future receipts in the plan cash flow, not current assets. Retentions due for release should be actively pursued on contract dates during the plan.

Active SOP adjudications generally continue during SBR — the statutory pathway is not displaced by Part 5.3B. Adjudicated amounts become provable debts in the plan. A plan cannot discharge a judgment debt already enforced, but can restructure how the debt is paid. SOP claims already progressed before the appointment should be coordinated with your restructuring practitioner to ensure plan and adjudication outcomes are aligned.

Yes. Directors retain control and can continue quoting and signing new contracts. Prospective clients may request evidence of solvency and plan progress — a restructuring practitioner's letter and current MFR status typically address these concerns. Over-committing the team before plan approval is the main risk to manage; discuss new-contract discipline with your practitioner.

Existing home warranty coverage for completed or in-progress residential projects typically continues. New project eligibility may be reassessed by the insurer based on the builder's financial position and SBR status — most insurers will re-engage once the plan is approved and financial metrics are re-verified. Do not lapse or miss scheduled insurance premium payments during SBR; coverage gaps can have licensing consequences.

DLP obligations on completed projects continue and must be resourced in the plan. Abandoning DLP can trigger retention forfeiture, insurance claims, and licensing consequences. The plan cash flow should include budgeted rectification work for current DLP projects. Where DLP exposure is material, this is disclosed to creditors as part of the plan proposal.

Project finance is typically secured against the development or with personal guarantees — SBR does not automatically terminate secured lending. Most banks review facility terms on an insolvency event, but a viable restructuring plan that preserves the security position usually allows continuation. Discuss with your lender before appointment; most prefer continuity over enforcement action.

Directors must move quickly to an alternative pathway: renegotiation with key creditors using updated cash evidence, Voluntary Administration (VA) where stakeholder complexity is too high for SBR, or liquidation where viability cannot be restored. Having a fallback ready before voting starts protects project continuity. Construction timelines move fast — delay compounds licensing, insurance, and contract risk.

Project pipeline with expected receipts by month, full creditor aging (ATO, subbies, suppliers, rent, secured), BAS and PAYG lodgement status, major contract terms and termination clauses, retentions schedule by project, licensing status (QBCC MFR / state equivalents), insurance certificates, and a 13-week cash flow forecast. Having this material ready compresses the scoping phase and improves the quality of the plan proposal.