If your company is struggling with debt but still has a viable future, Small Business Restructuring (SBR) may be the solution. SBR helps eligible businesses regain financial stability while continuing to trade, giving directors the opportunity to restructure debts and guide their company toward recovery, without losing control of operations. Here’s what you need to know about the process, its benefits, and whether it’s the right option for your business.
What Is Small Business Restructuring (SBR)?
SBR, introduced under the Corporations Act 2001, helps small businesses restructure debts and avoid liquidation. Unlike voluntary administration, where an external administrator takes control, or liquidation, which leads to business closure, SBR allows directors to stay in control while working with Resolv and out team of experts to develop a SBR plan.
Key Benefits of SBR
Small Business Restructuring offers a path forward for companies facing financial difficulties while still having a viable future. By understanding these benefits, directors can make informed decisions about whether SBR is the right solution for their business.
Directors Stay in Control – Unlike voluntary administration, directors continue running the business and making day to day operational decisions.
Reduced Debt – If creditors agree the Company's unsecured debts may be reduced by over 70%.
Business Continues Trading – Employees, suppliers, and customers can maintain their relationships with the business.
Simplified & Cost-Effective – The process is streamlined and designed to be more affordable than other alternatives.
ATO & Creditor Protection – Legal actions, such as statutory demands and winding-up applications, are paused while the restructuring plan is in progress.
Who Is Eligible for SBR?
To qualify for SBR, a company must meet the following criteria:
Total debts (including secured and unsecured) must be under $1 million.
All employee entitlements (including superannuation) must be paid up to date.
Tax lodgements must be up to date.
The company must not have undergone SBR in the last seven years.
No Director, or former Director (12 months) has undertaken an SBR or Simplified Liquidation process on another Company in the last 7 years.
How the SBR Process Works
Appointment of a Restructuring Practitioner
The company appoints a registered SBRP to oversee the process and assist in developing a restructuring plan.
The SBR process generally takes 35 Business days in total.
Developing a Restructuring Plan
Directors and Resolv work with the SBRP to create a proposal outlining how debts will be repaid. This typically involves offering creditors a reduced repayment amount either up front or over time (maximum of 3 years).
Creditors Vote on the Plan
Creditors review the plan and vote on whether to accept it. If the majority (by value of debt) approve, the plan becomes binding. In our experience the ATO is usually the largest creditor.
Implementation of the Plan
The company follows the agreed repayment structure, and as long as payments are met, creditors cannot take enforcement action.
Is SBR Right for Your Business?
SBR is a great option for businesses that:
Are experiencing short-term financial distress but have a viable core business.
Need debt relief while continuing operations.
Have creditors willing to engage in a compromise rather than force liquidation.
However, if your company cannot meet employee or tax obligations, or if debt levels exceed $1 million, alternative solutions like Voluntary Administration or Creditors’ Voluntary Liquidation (CVL) may be more appropriate.
Why Early Action Matters
If your business is struggling with debt, seeking advice early can mean the difference between recovery and closure. Small Business Restructuring is designed to help viable businesses survive, but waiting too long may leave fewer options available.
How Resolv Can Help
At Resolv, we specialize in guiding directors through financial distress with clear, practical solutions. Whether you’re considering SBR or need advice on other insolvency options, we can help you navigate the process with confidence.
If you think Small Business Restructuring might be right for your business, contact us today for a confidential discussion about your options.