What Is a Small Business Restructure (SBR) and How Does It Work?
What Is SBR?
Small Business Restructuring (SBR) is an Australian legal process introduced in January 2021 to help small, financially distressed companies negotiate and restructure their debts while continuing to trade. Under this framework, directors retain control while working with a registered restructure practitioner to formalise a repayment plan.
Who Is Eligible?
To qualify for SBR, your company must:
Be a small incorporated business (Pty Ltd).
Have total liabilities under $1 million, including secured and related-party debts.
Not already be subject to another insolvency proceeding.
Be current with lodging tax returns and PAYG/Super obligations.
How Does the Process Work?
Appointment – The director appoints a Small Business Restructuring Practitioner (SBRP).
Plan Development – Within 20 business days, the SBRP helps draft a detailed restructuring plan outlining:
Debt repayment offers to creditors.
Cash flow-informed projections.
Structured repayment schedule
Creditor Vote – Creditors have 15 business days to vote on the plan during which no enforcement actions can be taken
Plan Execution – If approved by the majority in value of voting creditors, the company implements the plan and discharges remaining amounts per the agreement
Completion – Once obligations are met, the company exits the SBR framework and continues operating as normal.
Key Benefits
Director control maintained – unlike voluntary administration or liquidation
Creditor moratorium during the process.
High acceptance – over 90% of plans receive creditor support
AT0-backed – the ATO typically supports sensible and feasible plans
Predictable costs – fixed upfront fee agreed prior, with additional fees tied to payments made
Why It Matters Now
With the ATO aggressively recovering over $35 billion in outstanding debt, SBR is emerging as a popular route for viable businesses to stay afloat legally and financially. The process is gaining traction, with ATO-led restructurings projected to increase in 2025.
Is SBR Right for You?
If your business is viable but burdened by tax or trade debt, and you meet the eligibility criteria, SBR can be a powerful legal tool to:
Reduce creditor claims.
Prevent liquidation.
Keep the business trading.
Need help assessing eligibility or preparing an SBR? Reach out to our team for a free assessment and see how restructuring could secure your business’s future.
References
Australian Government Treasury – Simplified Debt Restructuring Fact Sheet
Australian Taxation Office – Small Business Restructure Overview
The Australian – Corporate Insolvency Index – 219% Increase
Herald Sun – Tonka, Coda Restaurants Enter SBR
