What SBR is, in one paragraph.
Small Business Restructuring (Part 5.3B of the Corporations Act 2001) is a 35-business-day process during which a director, supported by a registered Small Business Restructuring Practitioner, proposes a plan to creditors that compromises the company's debts. If creditors representing more than 50% by value of admitted debt vote in favour, the plan binds all unsecured creditors — including the ATO. The company keeps trading, the director stays in charge, and the debts are settled at whatever cents-in-the-dollar the plan provided.
Most companies that qualify for SBR never use it — because nobody told them it exists.
SBR was a deliberate response to the 2020-21 economic shock. The legislators wanted a restructuring tool that didn't require companies to hand control to an external administrator, and didn't cost the $80,000+ that Voluntary Administration typically does. The result is a lighter-touch framework, designed for owner-managed businesses with under $1 million in debt.
Who qualifies (and who doesn't).
The statutory criteria are deliberately narrow:
- Incorporated. Pty Ltd only. Sole traders, partnerships and trusts can't access SBR — they have different pathways.
- Total liabilities under $1 million. Excludes employee entitlements. The cap is hard.
- Lodgments substantially up to date. BAS, tax returns. Doesn't have to be paid — just lodged.
- Employee entitlements current. Wages and super up to date at the time of appointment.
- Insolvent or likely to become insolvent. The legal test, not just feeling stressed.
- No prior SBR or simplified liquidation in the last 7 years — by the company or any of its directors.
Each of these can have nuance — for example, "substantially current" lodgments is interpreted in practice with some flexibility, and arrears that are fixable before appointment don't disqualify you. The 60-second qualifier walks you through it.
How SBR compares.
Most directors only learn about restructuring once they're already in crisis — at which point the comparison usually narrows to two or three options. Here's the simplified version:
The honest summary: SBR is materially cheaper and faster than VA, and far less destructive than liquidation — if you qualify. If you don't, the next-best option depends entirely on your circumstances. There's rarely one right answer.
The 60-second test.
You don't need documents. You don't need to identify yourself. Just answer six plain-English questions and the qualifier returns a position — strong candidate, borderline, remediation needed, or a different pathway. Every result has a recommended next step.