Background
Challenges
Trading restrictions imposed by the Covid-19 pandemic:
- Lockdowns and poor economic conditions impacted the business’s performance
- Relocation to new premises due to high rent in the previous location (incurred relocation cost and disruption to the business operation)
Reasons for hope
- The company introduced initiatives to boost project efficiency, incorporating regular cash flow projection and monitoring, encompassing efforts to reduce costs and exploring the possibility of relocating to a smaller warehouse, among other strategies. Additionally, staff costs were reduced to improve operational efficiency.
Debt Profile
The company had debts amounting to $603,167. A majority of the debt owed to the ATO.
SBR Process & Proposal
The business owners engaged us to help with their situation. With our guidance and support through the SBR process, a compromise plan was proposed:
- $130,000 over 22 monthly contributions.
- The plan was accepted by creditors.
Outcome for Clients
Overall the plan was a success for clients who saved thousands off their ATO bill and creditors were able to obtain a return instead of nothing all.
Return for creditors
- 18.57 cents in the dollar (SBR)
- The alternative was 9.75 cents in the dollar in the case of liquidation.
Company savings
- This business saved $490K off their tax bill
- Company was able to slash 81% off their debts
