Small Business Debt Restructuring (SBR)

Small Business Restructuring (SBR) is an initiative provided by the Australian Taxation Office (ATO) to assist small businesses that are struggling with debts. The process helps businesses restructure their debts and avoid liquidation. SBR offers an alternative to Voluntary Administration by allowing businesses to negotiate with creditors to reduce and manage their debts, providing a fresh start and a clearer path to financial recovery.

Small business restructuring works by allowing businesses to reorganise their financial obligations through a structured process. The business must meet certain criteria, such as having a debt level that qualifies for restructuring, and work with a qualified restructuring practitioner. 

The process involves negotiating with creditors, including the ATO, to reduce debt and establish more manageable repayment terms. The business has up to 35 business days to complete the process, which helps avoid liquidation and provides a sustainable financial plan moving forward.

While small business restructuring can offer a fresh start, it may impact your credit score. 

The restructuring process may be noted on your business’s credit report, which could affect your ability to access credit in the short term. However, compared to liquidation or bankruptcy, restructuring is a more positive alternative, as it shows a willingness to resolve financial issues rather than defaulting on obligations. Over time, with good financial management, your credit score can improve as your business returns to stability.

Small business restructuring is a relatively quick process, typically taking up to 35 business days to complete. During this time, the business works closely with a restructuring practitioner to assess its debts, negotiate with creditors, and implement a new financial plan. 

The streamlined process allows business owners to manage their finances efficiently and avoid the long-term negative consequences of liquidation.

Small business restructuring primarily focuses on ATO debts but can also include other types of unsecured debts, such as outstanding supplier invoices or loans. The process is most beneficial for businesses with a manageable level of debt, allowing them to restructure these financial obligations into more manageable terms. Secured debts, such as mortgages or vehicle loans, are generally excluded from the restructuring process.

No, small business restructuring is not the same as bankruptcy. 

While both processes aim to resolve financial issues, restructuring is a more positive and structured approach to addressing debt. Small business restructuring allows the business to continue operating, whereas bankruptcy typically involves winding down operations. 

Restructuring helps businesses reduce debt, negotiate with creditors, and avoid liquidation, offering a chance for recovery and long-term financial success.

At Fix My Credit, we can help businesses navigate the restructuring process, negotiate with creditors, and ensure compliance with legal requirements. We understand the specific needs of small businesses and can provide tailored advice and support throughout the restructuring process.