Small Business Restructuring (SBR) Process
Cut debt by up to 80%, stay open for business, and extend the debt's due date. All with legal protection.
If you run a small business in Australia and are struggling with unmanageable debt, you're not the only one. In 2025 alone, nearly 11,000 Australian businesses had to close because they were dealing with the same issues you were.
Small businesses make up the majority of business tax debt, with $35 billion being chased up by the ATO. In 2024/25 alone, 85,000 Director Penalty Notices were issued by the tax office, along with 15,000 garnishee notices. But even those efforts only scratch the surface of the total debt sitting across the system. The tax office's debt collection methods are only just ramping up.
Now you've also got rising interest rates, higher operating costs, and tighter consumer spending, so it's no wonder so many Australian small businesses are doing it tough.
If your company is choking it with debt, a Small Business Restructure may be one of the strongest options available to get back on your feet. This page is for Australian business owners looking for a solution that could
- Reduce their total debt
- Provide legal protection from their creditors (including the tax office)
- Offer a pathway to keep their business open
What is a Small Business Restructure?
A Small Business Restructure (SBR) is a formal process that allows eligible Australian business owners to tackle their debt, stay in control of their business, and avoid closing their doors.
It's a formal insolvency process introduced in 2021 specifically tailored for small businesses with unmanageable debt. As it's relatively new, not many business owners or accountants know about it yet!
Unlike voluntary administration or liquidation, SBR is designed to give viable businesses a real chance to survive. Creditors receive more than they would in a liquidation, and the business gets a path forward without shutting down.
What is a Small Business Restructure?
A Small Business Restructure (SBR) is a formal process that allows eligible Australian business owners to tackle their debt, stay in control of their business, and avoid closing their doors.
It's a formal insolvency process introduced in 2021 specifically tailored for small businesses with unmanageable debt. As it's relatively new, not many business owners or accountants know about it yet!
Unlike voluntary administration or liquidation, SBR is designed to give viable businesses a real chance to survive. Creditors receive more than they would in a liquidation, and the business gets a path forward without shutting down.
What an SBR can do for your business
Reduce debt owed
Vary the amount of debt owed to creditors by up to 80%.
Stop interest & penalties
Stop interest and penalties including GIC and SIC from accruing.
Extend repayment time
Extend the timeframe to repay debts, giving the business room to recover.
Get legal protection
A moratorium kicks in, stopping creditors from taking any action against you.
Keep your business trading
Directors remain in control and the business continues to operate throughout.
How small business restructuring works
Business Debt Assessment
Our expert panel goes through your scenario, assesses what options are available, and helps you understand them. We'll discuss if you qualify, if you can become eligible, and if it's the right option for you.
Preparation for your best interests
We help prepare everything with the director's best interests in mind. We ensure you go into the process informed, protected, and in the strongest possible position.
Appoint a restructuring practitioner
Appoint a trusted registered restructuring practitioner to commence the proposal period. The practitioner prepares a proposal to put forward to creditors, and legal protection is put in place from the moment they are appointed.
Restructuring plan proposed
The proposal on how you address the debt is presented to creditors. This often includes adjusting the amount of debt, the timeframe in which it is to be paid back, and how instalment payments may be made.
Creditors vote
Creditors vote on the plan. If the majority (by value of the total debt) accept, the plan is binding on all unsecured creditors.
Plan implemented
The plan is implemented and the business moves forward with reduced debt, legal certainty, and a path to recovery.
What is the eligibility criteria for a Small Business Restructuring (SBR) Process?
SBR is only available to companies that meet specific eligibility criteria. The key requirements are:
- The company has liabilities of less than $1 million
- Tax lodgements are up to date
- Employee entitlements are paid or being paid
- The director has not used SBR in the last 7 years
- The company is insolvent or likely to become insolvent
If you don't meet the eligibility criteria listed above, don't worry, you may still be able to do an SBR as the business only needs to be eligible when presenting the proposal. As part of our debt-solving process, our debt expert panel will work with you to make your business eligible if they believe you would otherwise see success in the Small Business Restructuring process.
If you are unsure whether your business qualifies, the best step is to get in touch. We can help you work through eligibility quickly.
Why business owners do Small Business Restructures
Keep the business trading
For the right company, restructuring may offer a path forward that does not start with shutting the doors.
Reduce debt to a more manageable level
The point is not to pretend the debt does not exist. The point is to deal with it in a way that the business may actually survive.
Directors stay in control
Unlike other insolvency appointments, a Small Business Restructure keeps the director or directors in control of the business throughout the entire process. A restructuring practitioner acts as a trusted advisor alongside you, available to answer questions at every step.
Get legal protection from creditor action
From the moment a restructuring practitioner is appointed, a moratorium takes effect. Creditors cannot pursue legal action, wind-up proceedings, or enforcement action against the company while the process is underway. That breathing room is often what makes the difference.
Get a proper framework instead of just hoping a payment plan fixes everything
A payment plan can help in some cases. In others, it just drags out the pain without fixing the underlying problem.
Not sure which is right for your situation?
Learn more about ATO Payment Plan vs Small Business Restructuring
Insights into small business restructuring
If you want to understand how restructuring could help your business with unmanageable debt, start with these articles.
Frequently Asked Questions (FAQs)
If your business is under pressure, the worst thing you can do is guess. These are some of the questions business owners ask before taking the next step.
Small business restructuring is a formal process for eligible incorporated companies in financial difficulty. It is designed to let the company propose a plan to creditors while the directors stay in control of the business.
Yes. One of the main features of small business restructuring is that directors remain in control and the business can keep trading during the process. That is a meaningful difference from other formal options.
Generally, it is aimed at eligible incorporated businesses with liabilities under $1 million and up-to-date lodgments. But if your business isn't currently eligible, your business may still be able to become eligible. Get in contact with us to find out how.
Get in contactATO debt is often one of the biggest drivers behind restructuring. The exact treatment depends on the business, the total debt position, and the plan put forward to creditors. That is why ATO pressure is often the first signal that the business needs a more formal option.
Not automatically. If the business is genuinely viable and the debt can be dealt with properly, restructuring may be the stronger path. If the business is no longer viable, another option may be more realistic. The right answer depends on the company, the debt, and the timing.
It is not something that drags on forever. ASIC says the company generally has 20 business days to propose a plan, with one possible extension of up to 10 business days in some cases.
Need a clearer next step?
If the business is under pressure, the earlier you look at it the more room you usually have to move.