What it is
- Formal legal restructuring process
- Designed for eligible small companies in distress
- Directors usually remain in control
- Requires practitioner oversight and creditor vote
Government-backed small business insolvency pathway
What is Small Business Restructuring?
SBR is a formal process that helps eligible companies compromise debt while directors keep control. For viable businesses under pressure, it can provide a path to keep trading rather than close down.
3,388+
Appointments (July 2022 - December 2024)
87%
Approval rate
93%
Still trading post-SBR
$1,000,000
Current liability cap
Source: ASIC Report 810: Review of small business restructuring process 2022-24, June 2025. See the full data in our SBR statistics dashboard.
Quick Clarity
What Small Business Restructuring Is and Is Not
What it is not
- Not a guaranteed debt write-off
- Not available to every business structure
- Not a substitute for ongoing tax compliance
- Not risk-free if cash flow cannot support the plan
Why Businesses Choose SBR
Benefits of Small Business Restructuring
Why viable businesses use SBR instead of waiting until options narrow.
Debt Reduction
Most viable plans target meaningful debt compromise while keeping the operating entity alive.
Directors Stay in Control
You usually retain management control instead of handing operations to an external administrator.
Continue Trading
Revenue operations can keep running while the plan is prepared and voted on.
Enforcement Pause
Appointment can pause active creditor enforcement and create immediate breathing room.
DPN Window Support
In time-critical DPN scenarios, SBR can be part of a fast protective response strategy.
Employee Priority
Employee entitlements are priority obligations and should be treated accordingly in the plan.
How Small Business Restructuring Works: Step-by-Step Process
Core timeline from first appointment to final plan completion.
Structured Timeline
Most of SBR is a structured execution process
The strongest outcomes usually come from fast preparation, disciplined communication with creditors, and a realistic payment plan.
Fast preparation
Complete financial records and plan documentation quickly to maximize timeline efficiency.
Disciplined creditor communication
Maintain consistent messaging to build confidence and prevent narrative drift.
Realistic payment plan
Develop achievable payment terms that creditors can support and the business can deliver.
Day 0-1 Step 1
Assessment and Appointment
- Initial eligibility check and practitioner engagement
- Directors resolve to appoint a restructuring practitioner
- ASIC notice lodged and process formally starts
Days 1-20 Step 2
Restructuring Phase
- Business continues trading under director control
- Financial position is reviewed and plan is drafted
- Plan must generally provide creditors a better outcome than liquidation
Days 21-35 Step 3
Creditor Voting
- Plan and report are issued to creditors
- Creditors vote over 15 business days
- Approval is by value of debts voting
Up to 3 years Step 4
Plan Performance
- Company makes agreed payments under the plan
- Practitioner supervises distributions and compliance
- When complete, covered debts are released according to the plan terms
Small Business Restructuring Costs and Practitioner Fees
What most owners want to know early: cost range, structure, and what changes the quote.
Median restructuring phase fee
$16,137
ASIC Report 810 (2022-24 sample)
Median plan phase fee
$6,739
Plan administration period
Typical total range
$15k-$30k
Varies by complexity and creditor mix
Main factors that affect cost
Number and complexity of creditors
Quality and speed of financial records provided
Disputed debts and legal issues
Cash flow complexity and plan design
For a full breakdown of practitioner fees, payment structures, and ROI analysis, see our detailed SBR cost guide.
Risks and Limitations of Small Business Restructuring
- Not every company qualifies, especially if lodgements are not up to date.
- Plans can fail creditor voting; rejection still leaves directors with urgent decisions.
- Cash flow discipline is critical. Missing plan payments can put the company back at risk.
- SBR is a legal insolvency process and should be managed with licensed practitioner advice.
Should Your Business Consider SBR? Decision Checklist
Use this quick checklist before committing:
- Is the core business still commercially viable after debt relief?
- Can you keep up with ongoing tax lodgements and current obligations?
- Do you have reliable cash flow forecasts for plan payments?
- Are directors prepared to provide complete financial records quickly?
- Have you compared SBR with VA, liquidation, and informal workout options?
SBR vs Liquidation vs Voluntary Administration: Comparison
| Feature | SBR | Voluntary Admin | Liquidation |
|---|---|---|---|
| Directors in control | Yes | No | No |
| Business continues trading | Yes | Uncertain | No |
| Typical cost | $15-30k | $50k+ | $20k+ |
| Timeframe | 5-6 weeks to vote | 2-3 months+ | 6-12 months |
| Debt compromise potential | Often high | Varies | N/A |
SBR Eligibility Requirements in Australia
You must satisfy all legal criteria. This is a practical summary, not legal advice.
Pty Ltd company
SBR is for eligible proprietary companies, not sole traders personally.
Liabilities under threshold
Current cap shown in this guide: $1,000,000.
Lodgements current
Tax lodgements generally need to be up to date or rectified quickly.
Not already in other administration
Cannot already be in liquidation or another disqualifying process.
7-year director rule
Directors cannot have used SBR in the prior 7 years.
Sources and References
Key references used across this page:
- ASIC Report 810 - Review of the small business restructuring process
- ATO - Small business restructuring overview
- Corporations Act 2001 (Cth)
Regulatory settings can change. Confirm current eligibility and thresholds before acting.
Related Small Business Restructuring Guides
How SBR Works
Step-by-step process timeline and what to expect at each phase.
Eligibility Criteria
Check whether your business qualifies for the SBR process.
SBR Costs & Fees
Practitioner fees, payment structures, and ROI analysis.
SBR Statistics
Latest data on appointments, approval rates, and outcomes.
SBR vs DOCA
How SBR compares to a Deed of Company Arrangement.
SBR Glossary
Key terms and definitions used in the restructuring process.
Act before options narrow
Check Your Small Business Restructuring Eligibility
If you are facing ATO pressure or creditor enforcement, timing matters. Validate eligibility quickly and move with a licensed practitioner if suitable.
Check Your Eligibility