For many small business clients, cashflow challenges can appear sudden. A few unpaid ATO obligations, supplier pressure, or the slow creep of debt that becomes unmanageable.
But behind these warning signs, there’s often a narrow window of opportunity to act and for some, the Small Business Restructuring (SBR) process can be the difference between a controlled turnaround and closing the doors for good.
What Is Small Business Restructuring (SBR)?
Introduced in 2021, the Small Business Restructuring framework was designed to give eligible companies a simpler, faster, and more affordable way to deal with financial distress without losing control of the business.
Unlike Voluntary Administration, where control shifts to an external administrator, in SBR, the company’s directors remain in control while working with a registered Small Business Restructuring Practitioner (SBRP) to prepare and propose a restructuring plan to creditors.
It’s a process focused on rehabilitation, not punishment.
Who Can Access It
To be eligible, a company must:
- Owe less than $1 million in total liabilities
- Be insolvent or likely to become insolvent
- Be up to date with employee entitlements and tax lodgements
- Have not undergone restructuring or simplified liquidation in the past seven years
These thresholds make SBR ideal for many SMEs and family-run businesses, particularly those with manageable debt levels but who need breathing room to reset.
Why It Matters for Advisors
For accountants, lawyers, and other professional advisors, understanding the SBR pathway is critical.
It allows you to:
- Spot clients who qualify before they drift into liquidation
- Protect directors from trading while insolvent, reducing personal risk
- Preserve enterprise value and client relationships
- Guide clients towards a structured, compliant solution instead of informal arrangements that may create more exposure
When you raise SBR as a potential option early, you don’t just help your client, you reinforce your value as a trusted advisor who knows where to turn.
Common Misconceptions
Even years after its introduction, there’s still confusion around what SBR actually is and isn’t.
❌ It’s not “mini administration.”
SBR is a distinct process where directors remain in control, not a watered down VA.
❌ It’s not a sign of failure.
It’s a structured opportunity for viable businesses to compromise debts and continue trading.
❌ It’s not only for micro-businesses.
While capped at $1M in liabilities, SBR can suit growing SMEs that hit temporary financial turbulence.
Clarifying these points with clients helps reduce stigma and fear, both of which are often the biggest barriers to seeking help.
How It Works in Practice
- Appointment — The directors appoint a Restructuring Practitioner to assess eligibility and start the process.
- Proposal Preparation —The plan proposal is drafted outlining how creditors will be repaid and submitted to creditors within 20 business days of appointment.
- Creditor Vote — Creditors have 15 business days to vote on the proposal.
- Implementation — If approved, the plan is implemented, and the company continues trading in the ordinary course.
From start to finish, the process is efficient, transparent, and when done correctly, a genuine alternative to formal insolvency.
The Insolvency Options Perspective
At Insolvency Options, we’ve seen SBR provide a lifeline for businesses that might otherwise have been lost.
When handled early and with the right professional guidance, it can:
- Protect jobs and suppliers
- Maximise returns to creditors
- Restore control and confidence for directors
- Strengthen the trusted advisor relationship
But timing is everything. Once creditor pressure escalates or the ATO initiates recovery action, the pathway becomes narrower.
For advisors, awareness of SBR isn’t just technical knowledge, it’s professional risk management.
Knowing when to raise the conversation, and who to bring in, could protect your client’s livelihood and your firm’s reputation.
If you have a client showing signs of financial stress, start the discussion now.
We can help you assess eligibility, explore all available pathways, and determine whether Small Business Restructuring is the right step forward.
Need to discuss a client scenario confidentially?
Contact Insolvency Options for a no-obligation consultation, we work alongside you to protect your client relationships and find the best path forward.
Book a confidential consultation with Darren
Want to go deeper?
For more insights into business recovery and debt solutions, listen to the i.O. — Insolvency Options podcast wherever you get your favourite podcasts. Each episode breaks down complex insolvency processes in plain English, with real world examples to help accountants, lawyers, and business advisors guide their clients with confidence.