Quick answer
SBR lets an eligible company propose a plan paying creditors part of what they're owed, with directors staying in control. The company's liabilities must not exceed $1 million, employee entitlements (including super) must be paid and lodgements up to date before a plan goes out, and neither the company nor its directors can have been through SBR or simplified liquidation within the last seven years. ASIC found a median 20 cents in the dollar to creditors. A successful SBR won't remit a lockdown director penalty.
Key points
- Liabilities must not exceed $1 million on the day restructuring begins.
- Employee entitlements (including super) paid and tax lodgements current before a plan is proposed.
- 20 business days to propose a plan; creditors have 15 business days to vote.
- ASIC (2025): median restructuring-stage fee around $16,000; median dividend 20 cents in the dollar.
- Doesn't remit a lockdown DPN, or a standard DPN not remitted within 21 days.
What is small business restructuring?
SBR is a formal insolvency process, introduced in 2021, designed for smaller companies. A registered small business restructuring practitioner is appointed by the company’s directors. With the practitioner’s help, the company prepares a restructuring plan — a proposal to pay creditors part of what they’re owed, usually over time. If creditors holding a majority in value of the votes cast accept it, the plan binds unsecured creditors, and the rest of their debts are released when the plan is completed.
Unlike administration or liquidation, directors stay in control of the day-to-day business. That’s the main reason SBR is heavily marketed to business owners with ATO debt.
Who is eligible?
| Requirement | Detail |
|---|---|
| Company | An incorporated company |
| Liabilities | Total liabilities must not exceed $1 million on the day restructuring begins |
| History | The company and its directors haven’t used restructuring or simplified liquidation in the previous 7 years (limited exceptions) |
| Employee entitlements | Those due and payable — including super — must be paid before a plan is proposed |
| Lodgements | Tax lodgements must be up to date before a plan is proposed |
Two of these trip companies up most often. First, super: under Payday Super, entitlements fall due every pay cycle, so a company behind on super has to catch up before a plan can go out. Second, lodgements: a company that’s behind on BAS needs to lodge them all — which may also reveal more debt.
What’s the timeline?
- Appointment. Directors appoint a registered SBR practitioner. Unsecured creditors are generally stayed from enforcing.
- Proposal period. Generally 20 business days to prepare and propose the plan (extensions are possible).
- Voting. Creditors have 15 business days to vote.
- Plan. If accepted, the company makes payments under the plan, administered by the practitioner.
What does it cost, and what do creditors get?
ASIC’s report REP 810, published in June 2025, reviewed SBR appointments between 2022 and 2024. Among its findings:
- median practitioner remuneration for the restructuring stage was around $16,000, with plan-stage remuneration usually charged as a percentage of payments to creditors;
- the median dividend to creditors was 20 cents in the dollar (average 21);
- around 87% of funds distributed to unsecured creditors went to the ATO;
- around 87% of proposed plans were approved.
Those are practitioner fees only. Any fees paid to pre-insolvency advisers, consultants or referrers sit on top and weren’t captured by ASIC’s data.
What won’t SBR fix?
This is the part most marketing leaves out:
- Lockdown director penalties. Per the ATO, even a successful SBR does not wipe a lockdown director penalty — nor a standard one that wasn’t remitted inside its 21 days. Directors can stay personally liable. See lockdown DPNs.
- Personal guarantees. Guarantees given to lenders, landlords and suppliers aren’t released by the company’s plan.
- Secured debts. Secured creditors generally aren’t bound in the same way.
- The future. The 7-year bar means you can’t use SBR or simplified liquidation again for a long time.
- The cause. If the business still can’t pay its tax as it falls due, the plan may fail — and plans that fail can lead to liquidation.
How does SBR compare with funding?
| SBR | Funding | |
|---|---|---|
| Creditors paid | Part — median 20 cents in the dollar | In full |
| Professional fees | Practitioner fees (and any adviser fees) | None — the loan’s own costs |
| Director control | Yes, with practitioner oversight | Yes |
| Lockdown DPN | Not remitted | Remitted by payment |
| Credit and supplier reputation | Formal insolvency appointment | No insolvency event |
| Future use | 7-year bar | No restriction |
| Who it suits | Companies that can’t repay in full but can pay something | Viable businesses with security or serviceability |
For a business with property equity or strong cash flow, funding can often clear the debt in full for less disruption. For a business without either, whose debts genuinely exceed what it can repay, SBR may be the more realistic path. Our restructure or refinance guide helps you decide.
How do you check an SBR practitioner?
SBR practitioners must be registered liquidators who have elected to act in that role. Check the ASIC professional registers. Ask how their fees are set (ASIC says initial fees are set by board resolution before appointment), whether anyone else is being paid, and what happens to any lockdown amounts. Take our questions to ask any adviser.
What happens if a restructuring plan fails?
If the company can’t keep up the payments under a restructuring plan, the plan can end, and the company may move into liquidation. By then, practitioner fees will have been paid, and any lockdown director penalties will still be outstanding. Ask any practitioner how often plans like yours complete, and what happens to you if yours doesn’t.
What a restructuring practitioner can’t do for you
A restructuring practitioner oversees the plan and helps the company propose it, but doesn’t take over the business or guarantee creditors will vote yes. They also can’t make lockdown director penalties or personal guarantees disappear. Ask any practitioner to set out in writing exactly what the appointment will and won’t change for you personally.
Before you appoint anyone
If your company is considering SBR, it’s worth spending a few minutes finding out whether funding could pay the ATO in full instead. See if you qualify — there’s no credit check to enquire, your details aren’t spread across lenders, and a real person will tell you honestly whether funding or a restructure fits better. We don’t sell restructures and earn nothing from them. Please give accurate figures, including any lockdown amounts.
Who you're talking to
We are
- A genuine private business funder
- Focused on keeping your business trading and you in control
- Upfront about the free options, even when they suit you better than a loan
- Happy to work alongside your accountant
We are not
- An insolvency firm, liquidator or administrator
- A "pre-insolvency" or debt-restructuring adviser
- A tax agent negotiating with the ATO for a fee
- Paid a percentage of your tax debt — ever
If funding can clear your ATO debt in a way the business can carry, we'll show you how. If it can't, we'll say so plainly and point you to free help or a registered professional. Talk to us before you sign anything.
Frequently asked questions
Who is eligible for small business restructuring?
An incorporated company whose total liabilities don't exceed $1 million on the day restructuring begins, where neither the company nor its directors have used restructuring or simplified liquidation in the previous seven years (with limited exceptions). Employee entitlements and lodgements must be up to date before a plan can be proposed.
How much does SBR cost?
ASIC's review of SBR from 2022 to 2024 found median practitioner remuneration of around $16,000 for the restructuring stage. Plan-stage fees are usually a percentage of payments to creditors. Pre-insolvency or referral fees, if any, are extra.
Does SBR stop a director penalty notice?
Appointing a restructuring practitioner within 21 days remits a standard director penalty. But the ATO says a successful SBR won't remit a lockdown director penalty or a standard penalty not remitted within 21 days.
Do I keep control of my company during SBR?
Yes. ASIC says directors remain in control, though transactions outside the ordinary course of business need the restructuring practitioner's consent.
Will the ATO vote for my plan?
The ATO is often the largest creditor. It supports plans that give creditors a better return within a reasonable time than winding up would, without public-interest concerns. Trade reports in 2026 suggest it now looks harder at viability and compliance.
Sources
Facts on this page were checked against official sources on 4 October 2026. Rules and thresholds change, so confirm anything critical on ato.gov.au or asic.gov.au.