What Is Small Business Restructuring (SBR) and How Does It Work?

What Is Small Business Restructuring (SBR) and How Does It Work?

Small Business Restructuring lets an eligible company with debts under $1 million reduce and restructure what it owes while the directors stay in control and the business keeps trading. You appoint a Small Business Restructuring practitioner, propose a plan to creditors, and if they accept it, you pay an agreed portion of the debt over time. It's the middle path between doing nothing and shutting the doors.

Here's how it works, and when it's the right call.

Who it's for

SBR is built for smaller companies — broadly, total liabilities under $1 million, with tax lodgements up to date and employee entitlements like super paid. It suits a business that's sound at its core but weighed down by debt — often ATO debt — it can't clear on current terms.

How it works, step by step

• Appoint a restructuring practitioner. A registered practitioner comes on board — but unlike liquidation or administration, you keep running the company.
• Build the plan. Within about 20 business days, you and the practitioner prepare a restructuring plan setting out how much of the debt will be paid.
• Creditors vote. Creditors have 15 business days to accept or reject. Acceptance needs a majority by value of those who vote.
• Trade on. If it's accepted, the plan binds creditors, you pay the agreed amount over the plan period, and the business keeps going.

Why directors choose SBR over liquidation

• You stay in control — no external administrator running your company.
• The business keeps trading instead of being wound up.
• It can cancel a non-lockdown DPN if the practitioner is appointed within the 21-day window.
• It's generally faster and lower-cost than voluntary administration.

The catch to watch

Eligibility is strict — tax lodgements must be up to date and employee super paid before a plan can proceed. And it's a formal process run by a registered practitioner, so getting the timing and the numbers right before you commit matters. That's exactly where independent guidance earns its keep.

Common questions

What is Small Business Restructuring?

A formal process that lets an eligible company with debts under $1 million restructure its debt while directors stay in control and keep trading. A practitioner is appointed, a plan goes to creditors, and if accepted you pay an agreed portion over time.

Who's eligible?

Broadly, a company with total liabilities under $1 million, tax lodgements up to date, and employee entitlements such as super paid.

Is SBR better than liquidation?

It depends on the business. SBR keeps directors in control and trading, is usually faster and cheaper than voluntary administration, and can cancel a non-lockdown DPN if started in time. Liquidation winds the company up. Which is right depends on eligibility and your position.

Where I fit

I'm not a liquidator or trustee, and I don't take a referral fee from the practitioners I work with. I help you work out whether SBR is genuinely the right move — or whether a payment arrangement or another path fits better — then coordinate the right restructuring practitioner and keep you steady through it.

Wondering if SBR fits your business? Book a phone or video time at resolvency.com.au/book or call 0457 099 099.

General information only — not financial, legal or tax advice. Everyone's position is different, so get advice specific to yours before you act.

Related service: ATO Debt & Payment Pressure — see how I can help.