Cafe owner standing behind counter in busy hospitality venue

23% of all SBR cases

Small Business Restructuring for Restaurants & Hospitality — SBR for Cafes, Bars & Food Services

Q: How much debt can be reduced through SBR?

Based on ASIC data, businesses typically see debt reductions of 60-80% through SBR. However, the exact amount depends on your specific circumstances and what creditors will accept. The proposed payment must offer creditors a better return than they would receive if the company went into liquidation.

Q: Will the ATO accept an SBR plan?

The ATO has shown strong support for SBR, approving over 90% of plans where they are a creditor. The ATO recognises that receiving a reduced payment through SBR is often better than receiving nothing through liquidation. However, your tax lodgements must be up to date for the ATO to support your plan.

Q: Can we keep trading during SBR?

Usually yes. Directors generally remain in control and can continue operations while the plan is prepared and voted on.

Q: How should hospitality businesses handle landlord arrears?

Landlord terms are often central to viability. Early, evidence-based negotiation is typically essential.

Q: What if creditors reject the SBR plan?

Directors should move quickly to a fallback pathway such as targeted renegotiation, VA, or liquidation depending on viability.

Hospitality is Australia's #2 industry using Small Business Restructuring at 23% of all SBR appointments. Learn how restaurants, cafes, and bars use SBR to restructure COVID-era debt, manage landlord arrears, and keep venues trading.

TL;DR

→ #2 SBR industry — hospitality represents 23% of all 3,388 SBR appointments from July 2022 to December 2024 (ASIC Report 810, June 2025), allowing restaurants, cafes, bars, and food service businesses with debts under $1,000,000 to restructure while directors retain control and venues keep trading
→ COVID debt legacy — a major driver including deferred rent now being called in, ATO debt from JobKeeper reconciliation, supplier accounts extended during lockdowns, and emergency loans taken to survive closures
→ Cost and timeline — SBR costs $15,000–$30,000 (median restructuring fee $16,137 + median plan fee $6,739) and takes 5–6 weeks vs voluntary administration at $50,000–$150,000+ over 3–6 months
→ Hospitality-specific challenges — seasonal revenue fluctuations, high fixed costs (rent, staff, utilities), thin margins where small revenue drops create cash flow crises, perishable inventory waste, and complex landlord/lease negotiations; landlords often prefer a restructured tenant to an empty premises, giving SBR leverage in lease discussions
→ High success rate — plan approval rate is 87% across all industries, with 93% of companies still trading after SBR completion; debt priority: (1) employee wages/super/leave, (2) food/beverage/utility suppliers, (3) landlord and lease obligations, (4) ATO liabilities
→ First-week actions — map landlord arrears and lease critical dates, reconcile ATO debt and BAS lodgement backlog, segment suppliers into critical vs deferrable, set daily cash tracker by venue, review menu margins and wastage, prepare P&L and 13-week cash forecast
→ If plan rejected — 14% creditor rejection rate; renegotiate with updated cash evidence, shift to VA if creditor complexity is too high, or move to orderly closure if viability cannot be restored; governed by Part 5.3B of the Corporations Act 2001, introduced by the Corporations Amendment (Corporate Insolvency Reforms) Act 2020, effective 1 January 2021

The COVID Debt Legacy — Why Hospitality Businesses Need SBR in 2026

Many hospitality businesses took on significant debt during COVID, including:

• Deferred rent that's now being called in
• ATO debt from JobKeeper reconciliation
• Supplier accounts extended during lockdowns
• Emergency loans taken to survive closures

Margin Pressure

Operational pressure usually builds before revenue drops

Hospitality businesses can stay busy while margins compress. Fast action on roster efficiency, stock control, and creditor sequencing often protects the most option value.

Maintain core service capacity

Keep critical service windows fully staffed and supplied to protect revenue.

Prioritise critical liabilities

Address debts that can shut the venue quickly (utilities, licenses, rent).

Use venue-specific cash modeling

Build 13-week forecasts tied to actual trading cycles and peak periods.

Chef plating dishes in active commercial kitchen

Why Restaurants, Cafes & Bars Use Small Business Restructuring — 23% of All SBR Cases

Restaurants, cafes, and bars face unique challenges that SBR can address:

Seasonal fluctuations: Revenue varies significantly through the year
High fixed costs: Rent, staff, and utilities don't stop when business is slow
Thin margins: Even small revenue drops can create cash flow problems
Perishable inventory: Food waste compounds financial pressure
Landlord relationships: Commercial leases can be complex to negotiate

Common Hospitality Debt Sources — ATO, Landlord Arrears & Supplier Accounts

ATO JobKeeper debt
Rent arrears
Supplier accounts

How SBR Helps Hospitality Businesses — Keep Trading, Reduce Debt & Protect Goodwill

Keep trading: Continue serving customers while restructuring
Reduce debt burden: Make the business profitable again at reduced debt levels
Preserve staff: Keep your team employed throughout the process
Protect goodwill: Maintain your reputation and customer relationships
Landlord negotiations: SBR can provide leverage in lease discussions

Case Study

Melbourne Restaurant

Debt before SBR

$381,000

Debt after SBR

$150,000

Restaurant continues to operate with reduced debt burden

Tips for Hospitality Businesses Considering SBR

Get your BAS up to date: This is essential for SBR eligibility

Document your viability: Show how the business can profit at reduced debt levels

Consider timing: Starting before your busy season can help show strong trading

Speak to your landlord: They often prefer a restructured tenant to an empty premises

Operator Playbook

Hospitality SBR — First 7 Days Action Plan for Restaurant & Cafe Owners

If cash pressure is escalating, speed and sequencing matter more than perfect forecasts.

Map all landlord arrears, payment plans, and lease critical dates.
Reconcile ATO debt, BAS status, and lodgement backlog immediately.
Segment suppliers into critical vs deferrable to protect service continuity.
Set a daily cash tracker by venue, roster, and stock cycle.
Review menu margin and wastage lines for fast cash-flow improvements.
Prepare current P&L, debt aging, and 13-week cash forecast for practitioner review.

Decision Framework

Hospitality Debt Priority Map — SBR Payment Hierarchy for Restaurants & Venues

Priority Level	Debt Type	Why It Matters
Highest priority	Employee wages, super, and leave	Staff continuity and legal compliance are non-negotiable.
Trading-critical	Food, beverage, and utility suppliers	Supply interruption can stop service rapidly.
Premises-critical	Landlord and lease obligations	Venue continuity depends on active lease management.
Statutory pressure	ATO liabilities	Often material in hospitality; lodgement discipline strongly influences outcomes.

If a Hospitality SBR Plan Is Rejected — Fallback Options for Restaurant Owners

Have a fallback plan before creditor voting starts. Hospitality can deteriorate quickly when supplier or lease pressure escalates.

Re-negotiate key landlord/supplier terms using updated cash evidence.
Shift to VA where creditor complexity is too high for an SBR approval.
Move to orderly closure/liquidation if viable trading cannot be restored.
Protect brand and customer trust with controlled communication plans.

Common Questions

Hospitality SBR FAQs — Restaurant Debt, Landlord Arrears & ATO Restructuring

How much debt can be reduced through SBR?

Will the ATO accept an SBR plan?

Can we keep trading during SBR?

How should hospitality businesses handle landlord arrears?

What if creditors reject the SBR plan?

View all FAQs

Restaurant team preparing venue for service

Keep your venue trading

Is Your Restaurant or Hospitality Business Eligible for Small Business Restructuring?

Check eligibility now so lease, supplier, and ATO pressure can be addressed before trading options narrow.

Check Your Eligibility

Small Business Restructuring for Hospitality Businesses by State

Hospitality restructuring needs vary by location. Find state-specific SBR information.

NSW VIC QLD WA SA TAS ACT NT

Learn more about how SBR works for Australian businesses.