Small Business Restructuring (SBR): What It Is and When It Makes Sense

Small Business Restructuring (SBR) was introduced in Australia to give viable small businesses a realistic alternative to liquidation. It allows directors to remain in control of their business while working with a registered Small Business Restructuring Practitioner to propose a plan to creditors.

SBR is designed for incorporated businesses with liabilities under the prescribed threshold and that are insolvent, or likely to become insolvent. The goal is not to avoid obligations, but to restructure them in a way that allows the business to survive and continue trading.

Importantly, SBR is time-bound and highly structured. A restructuring plan must be developed quickly, and creditors vote on whether to accept it. When used early, SBR can preserve value, protect jobs, and deliver a better outcome for both directors and creditors than a formal liquidation.