Small Business Restructuring for Tradies — SBR for Plumbers, Electricians & Trade Businesses

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.

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.

No state regulator automatically cancels a trade licence due to SBR. Plumbing, drainage, gas-fitting, and electrical licences are held by the entity or individual contractor — regulators assess ongoing financial fitness and conduct case by case. A plan that reduces company debt typically strengthens the fitness position. Disclosure obligations apply in every state (QBCC, NSW Fair Trading, VBA/ESV, Building and Energy WA, CBS SA, CBOS Tas, Access Canberra, NT BPB) and should be coordinated with your restructuring practitioner.

Yes. Directors retain control and day-to-day trading continues. You can continue quoting new work, invoicing current jobs, and managing apprentices and labourers. The main discipline during SBR is not accumulating new debt on existing creditor balances while the plan is being voted on.

Non-lockdown DPN options include pay in full, ATO payment plan, VA, SBR, or liquidation. Appointing a restructuring practitioner within the 21-day DPN window can remit director personal liability for the underlying company tax debt. Lockdown DPNs (BAS lodged 3+ months late) can only be discharged by full payment. Act fast — the 21-day clock starts at DPN issue date.

Equipment and vehicle finance is typically secured against the asset under PPSA. SBR does not automatically terminate secured finance, but arrears must be managed — financiers may negotiate continued use in exchange for bringing payments current. Assets fundamental to the business (utes, trailers, tools) should be prioritised. Where repossession risk is imminent, your practitioner may negotiate a standstill while the plan is prepared.

Subcontract obligations continue during SBR. Historic unpaid progress claims and retentions owed by head builders remain receivable — the plan models them as future cash inflows. Some subcontracts contain termination-on-insolvency clauses; review each with your practitioner before appointment. Most head builders prefer continuity to termination when the subbie is restructuring rather than liquidating.

Critical trade suppliers generally prefer a paying, restructuring customer to a bad-debt write-off. Historic supplier debt forms part of the plan; post-appointment orders must be paid on current terms (often COD or shorter terms temporarily). Trade accounts can sometimes be reinstated once the plan is approved.

Apprenticeship agreements are registered with state training authorities. SBR is not the same as liquidation — because the business continues trading, apprenticeships typically continue. Your practitioner will help coordinate any required disclosures to the training authority and Australian Apprenticeship Support Network provider.

Yes. Directors retain control and can continue quoting and signing new work. New jobs help build the viability case for the plan. Prospective clients generally don't know about the SBR unless you disclose it or they search ASIC records. The discipline is resourcing new work without over-committing materials or labour during the plan-voting period.

SGC that has already been crystallised as a director penalty (via a lockdown DPN) cannot be reduced through SBR — it must be paid in full. Unreported SGC arrears should be brought current before appointment wherever possible, because SGC affects both director personal liability and employee entitlement status. Your practitioner will quantify the SGC position early in scoping.

You must move quickly to a fallback: targeted renegotiation with key creditors, VA where complexity is too high for SBR, or orderly closure/liquidation where viability cannot be restored. Having a fallback ready before voting starts protects licence status, employee positions, and asset finance.

Full creditor aging (ATO, suppliers, equipment finance, vehicle finance, rent), BAS and PAYG lodgement status, open job schedule with collection certainty, equipment and vehicle finance statements, employee roster and super status, DPN correspondence if any, licence certificates, and a 13-week cash forecast. Having this material ready compresses the scoping phase.