1. Appointment of an SBR Practitioner
- The company appoints a registered Small Business Restructuring Practitioner
- Directors remain in control of day‑to‑day operations
The Small Business Restructuring (SBR) regime in Australia is a formal insolvency framework designed to help financially distressed small businesses restructure their debts while staying in control of their business. It was introduced in January 2021 under the Corporations Act 2001 (Cth).
The SBR regime allows eligible small companies to:
It is often described as a “debtor‑in‑possession” model.
A distressed business may choose small business restructuring (SBR) because it offers a faster, lower‑cost way to restructure debts while directors stay in control, provides temporary protection from creditor action, and allows the business to continue trading and preserve value rather than enter full external administration.
If creditors reject the plan:
✅ Directors stay in control
✅ Faster and cheaper than voluntary administration
✅ Protection from creditor action during the process
✅ Focus on business survival rather than shutdown
⚠ Not suitable if liabilities exceed $1 million
⚠ Secured creditors’ rights are largely unaffected
⚠ Requires realistic cash flow and credible restructuring plan
⚠ Failure to comply can lead to liquidation
| Feature | Small Business Restructuring (SBR) | Voluntary Administration (VA) |
|---|---|---|
| Target businesses | Small companies | Companies of any size |
| Liability limit | ≤ $1 million | No limit |
| Control of business | Directors remain in control | Administrator takes control |
| Cost | Lower | Higher |
| Speed | Faster (≈ 5–7 weeks total) | Slower (often 2–3+ months) |
| Creditor vote | >50% by value | Majority by number and value |
| Moratorium | Yes (limited) | Yes (broader) |
| Secured creditors | Largely unaffected | May be bound |
| Outcome focus | Debt restructuring | Restructure, sale, or liquidation |
| Stigma | Lower | Higher |
In summary
As restructuring and turnaround specialists, we leverage Small Business Restructuring (SBR) as a practical rescue tool to stabilise distressed but viable businesses and return them to profitability.
Our practitioners deploy SBR only where the core business is viable and cash flow can support a restructuring plan.
Used early, it is one of the most effective tools available to rescue small businesses and protect jobs, value, and director outcomes.
A company may be eligible if it:
SBR is a formal insolvency process, but it is designed as a rescue mechanism, allowing the business to restructure debts and continue trading rather than shut down.
No. Under SBR, directors remain in control of day‑to‑day operations while a restructuring practitioner oversees and certifies the plan.
Typically 5–7 weeks:
The plan generally binds unsecured creditors. Secured creditors and employee entitlements are usually not compromised.
The SBR ends. The company may then pursue voluntary administration, liquidation, or informal restructuring, depending on circumstances.
It is significantly cheaper than voluntary administration, with costs typically agreed upfront and proportionate to the size and complexity of the business.
Yes. Continuing to trade is central to SBR and often essential to funding the restructuring plan.
No. It works best where the core business is viable, liabilities are under $1 million, and directors engage early before cash flow collapses.
Note: The information provided is for general purposes only. It is not financial or legal advice. Please get in touch with a qualified expert from our team.
