Small Business Restructure (SBR): A Fresh Start for Australian Small Businesses

Running a small business can be tough, especially when things don’t go as planned. If you’re struggling with debt or cash flow but want to keep your business alive, a Small Business Restructure (SBR) might be the lifeline you’re looking for. Here’s a simple rundown of what an SBR is, how it can help, and if your business might qualify.

What’s a Small Business Restructure?

A Small Business Restructure (SBR) is a legal way for Australian businesses to re-organise their debt without shutting down completely. It’s like a financial ‘reset’ that lets you keep control of your business while working on a plan to pay down what you owe. Unlike liquidation (which can mean closing for good), an SBR helps you get back on track and move forward.

How Can an SBR Help You?

An SBR has some big benefits for small business owners, especially if you’re facing financial difficulties. Here’s how it could make a difference:

  • Lower Debt Stress: An SBR gives you room to negotiate a payment plan with creditors, making it easier to pay off your debt without overwhelming pressure.

  • Keep Your Business Running: Instead of closing, restructuring allows you to keep trading and hold onto your customer base while sorting out finances.

  • Stay in Control: With an SBR, you remain in charge of the day-to-day operations, so you get to call the shots during the process.

  • Less Red Tape: Compared to other formal processes, an SBR is designed to be faster and more affordable, making it more accessible for small businesses.

Who’s Eligible for an SBR?

Not every business can go for an SBR. Here’s a quick look at the main eligibility requirements under Australian law:

  1. Debt Cap: Your total debt must be less than $1 million (including any money owed to the ATO and other creditors).

  2. Financially Distressed: Your business needs to be experiencing financial distress but still has the potential to trade profitably once debts are restructured.

  3. Tax and Super Obligations: Your tax returns must be up to date, and all employee entitlements (like superannuation) should be paid.

  4. Director Approval: All directors need to agree on the plan to go through the restructuring process.

Final Thoughts

An SBR can be a great tool for getting a fresh start without shutting down your business. It’s a way to tackle debt, stay in control, and give your business the chance to bounce back.

If you think an SBR might help your business, reach out to us to see if this might be the right option for your circumstances. Remember, taking action sooner rather than later can make a big difference!

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