From Slow Start to Game Changer
When Small Business Restructuring was introduced, only 70 businesses took advantage of the process in the first full year (21-22). Not exactly a stampede, but word travelled fast. Now ASIC is predicting over 3,000 businesses to utilise the regime by the end of this financial year.
Why the sudden interest? Because directors are figuring out that a Small Business Restructure (SBR) isn't just another fancy insolvency term. It's actually a way to stay in the driver's seat while working out a realistic plan with your creditors.
ASIC has just released a report showing how more businesses are turning to SBRs, and the results speak for themselves.
The Numbers Don't Lie
What caught our attention in the report: 87% of all restructure plans have been approved by creditors.
This supports what we see in practice, where Resolv retains a 100% success rate on SBR proposal. When a fair proposal is presented, creditors are willing to work with Directors.
But here's the really interesting part. 92% of those approved plans actually get completed. The numbers also show that most of these companies (93%) have remained registered 6 to 12 months post the completion date.
That's not just surviving but proof this approach actually works.
"But What About My Creditors?"
I get this question a lot, and it's fair. Nobody wants to feel like they're screwing over the people they owe money to.
The reality is, creditors have received over $101 million via small business restructures. That works out to about 20-21 cents for every dollar owed, which might not sound like much, but it's often way better than what they'd get if the business just folded.
Most of that money (about 87%) has gone to the ATO. This makes sense since they're usually the biggest creditor for small businesses.
The bottom line is simple: when a viable business gets the chance to trade out of trouble, everyone benefits. A successful SBR often means jobs are saved, creditors see returns, and the business comes out stronger on the other side.
The Catch? You Need to Do It Right
While we continue to have a 100% success rate for Resolv clients, we'd be lying if we said every SBR is a positive outcome.
We stay connected to what’s really happening, guiding clients through SBRs and speaking with insolvency practitioners daily. However, we’re seeing the ATO take a firmer stance and the bar for plan acceptance is getting higher. You can't just put a plan forward and expect it to be approved.
This shows with the overall approval rate is slipping, with around 83% of plans expected to be approved this financial year. This means 17% are either rejected by creditors or terminated early. Additionally, 8% of approved SBR's have failed to reach completion. ASIC's report flags some concerns too: Advisors making unrealistic promises, misleading advertising and businesses misusing the system.
We hear and see the horror stories, where a business has been sold on the benefits of a Small Business Restructure, when in reality it never had a good chance of success. The Directors pay large upfront fees to advisors who present plans which are unrealistic. Once the SBR fails, the director is back at square one, insurmountable debts and often their only option being Liquidation.
This is exactly why getting proper advice matters. A good advisor won't just tell you what you want to hear, they'll help you build a plan that actually works, keeps creditors on side, and gives your business a genuine shot at recovery.
Why We Do This Work
At Resolv, we see the human side of these statistics every single day. We know what it's like when you're lying awake at night, wondering how you're going to make payroll, or when the ATO letters keep piling up and you don't know where to turn.
That's why we're here — not to judge, not to lecture, but to sit down with you and reframe what's actually possible. Sometimes that's a SBR, others it's something else entirely. But you deserve to know all your options before you make any big decisions.
If you're wondering whether a Small Business Restructure could work for your situation, let's have a conversation. No jargon, no pressure, just straight talk about what might be possible.
Ready to explore your options? Get in touch.