Challenges such as rising costs, changing market conditions and unexpected global events have tested the resilience of Australia’s small business sector in recent years.
Enter the Small Business Restructure (SBR) framework – a government backed initiative designed to help struggling business regain stability while contributing to broader economic recovery.
Secure your future with strategic Small Business Restructuring tailored to your business needs.
AVA ADVISORY
The Small Business Restructure framework was introduced as part of the Federal Government’s insolvency reforms, effective from January 2021. This initiative provides small businesses with a simplified and streamlined path to address financial difficulties while continuing to trade.
Key features of a Small Business Restructure:
• Debtor-in-possession model: Unlike traditional insolvency processes, the business owner retains control of the company while developing and implementing a restructuring plan.
• Professional guidance: The process requires the assistance of a registered Small Business Restructuring Practitioner (SBRP) to assess financial viability and craft a plan that balances creditor repayment and business sustainability.
• Reduced cost and complexity: Designed with small businesses in mind, the framework offers a cost-effective alternative to liquidation or voluntary administration.
Supporting business resilience and recovery
The SBR framework is particularly valuable in fostering resilience among small businesses. Here’s how:
Small businesses are among the largest employers in Australia, and their survival directly impacts employment levels. The debtor-in-possession model ensures businesses can keep operating during the restructuring process, reducing the risk of mass layoffs. Employees retain their jobs, preserving valuable skills within the workforce and preventing additional strain on social welfare systems.
For business owners facing financial hardship, the prospect of liquidation can be daunting and often perceived as a final failure. The SBR framework shifts this narrative by offering a constructive path forward. Knowing that there is an avenue for recovery can boost confidence, encouraging business owners to seek assistance early and avoid unnecessary closures.
A key element of the framework is the focus on creditor negotiation. The SBR process enables businesses to present a realistic repayment plan, fostering transparent communication and collaboration with creditors. This approach often leads to better outcomes for both parties, as creditors receive more favourable returns compared to traditional insolvency methods.
Our streamlined small business restructuring approach follows four proven steps designed to maximise your chances of financial recovery. Throughout your small business restructure journey, our specialist team provides practical guidance and comprehensive support.
Assessment
We begin with a thorough evaluation of your business to determine if a small business restructure is your optimal path forward. Our SBR specialists conduct an in-depth viability review, analysing your current financial position and circumstances to assess the potential for a successful restructuring outcome.
Restructuring
Your assigned practitioner works closely with you to create a comprehensive small business restructuring plan within 20 business days. Drawing on our extensive restructuring expertise, we provide strategic guidance to develop a plan that aligns with your goals, addresses creditor priorities, and delivers optimal outcomes for your business.
Execution Plan
Following creditor approval, successful execution of your small business restructure plan becomes paramount. We collaborate with your SBRP to oversee the implementation process, managing creditor obligations and executing required changes. Our robust project management approach ensures your restructuring plan stays on track.
Post-SBR Support
Beyond the formal small business restructuring period, we provide continued guidance to help cement your business’s renewed financial stability. Our team monitors progress, assists with ongoing obligations, and helps you maintain the positive momentum achieved through the SBR process.
While the small business restructuring process offers valuable support for financially distressed companies, specific eligibility criteria must be met to commence an SBR. Review these key requirements to determine if your business qualifies for a small business restructure:
• Your business must operate as an incorporated company (Proprietary Limited or Pty Ltd) in Australia
• Total liabilities must be less than $1 million.
• All required tax lodgements with the Australian Taxation Office must be current
• All employee superannuation payments must be up to date
• The company must be cash flow insolvent now or about to become insolvent in the near future.
• There should be reasonable prospects for successful trading following the implementation of your small business restructure
As Small Business Restructuring specialists, we provide invaluable guidance to directors and owners during the Small Business Restructuring process, such as:
• Comprehensive Viability Assessment
Our team conducts thorough preliminary reviews to determine if a Small Business Restructure suits your situation and offers strong prospects for success.
• Expert SBRP Selection
We match your small business restructuring needs with qualified practitioners from our network of restructuring professionals, ensuring alignment with your desired outcomes.
• In-depth business analysis
Our small business restructure specialists analyse your operations, finances, assets and liabilities to develop an informed restructuring strategy.
• Strategic creditor management
We leverage our expertise to negotiate effectively with creditors, building support for your small business restructuring plan.
• Customised restructure planning
Our team provides practical guidance in developing a robust, achievable small business restructure plan tailored to your circumstances.
• Implementation expertise
We collaborate closely with you and your SBRP to execute your approved restructuring plan efficiently.
• Ongoing support
Post-restructure advisory services help protect your interests as your business returns to growth.
• Contingency planning
If a small business restructure proves unsuitable, we guide you through alternative options while safeguarding your position as director.
Through our extensive experience supporting Australian businesses through the small business restructure process, we’ve identified key challenges that directors and owners typically face. Here’s how AVA Advisory helps you overcome these obstacles:
• Managing cashflow
Throughout your small business restructuring journey, maintaining adequate working capital is crucial. Our specialists assess funding requirements and identify viable options to sustain operations during the restructure.
• Financial Forecasting
Accurate viability projections are essential for a successful small business restructure. Our experts develop robust forecasts based on realistic market conditions and business performance metrics.
• Stakeholder management
A small business restructure can create uncertainty among customers and suppliers. We maintain stakeholder confidence through strategic communication and relationship management throughout the SBR process.
• Supply chain negotiations
Securing favourable terms from suppliers during restructuring requires expertise. Our small business restructuring specialists negotiate effectively to protect your commercial interests.
• Protecting assets
During the restructure process, secured creditors may threaten asset security. We negotiate protective arrangements to safeguard your business assets throughout the SBR.
• Meeting deadlines
The 20-business-day window for developing your small business restructuring plan requires efficient execution. Our proven methodology ensures timely delivery of your restructure strategy.
• Performance management
Ongoing trading losses during restructuring demand swift action. We provide clear analysis and practical guidance on critical business decisions, including the strategic assessment of unprofitable operations.
AVA Advisory’s pragmatic approach to these common restructuring challenges maximises your chances of a successful small business restructure. Our experienced team provides tailored solutions to help your business navigate the SBR process effectively.
Let’s start mapping your path to financial freedom.
Don’t wait – the earlier we start, the more debt relief options will be available. Contact us today on 1300 181 220 for an obligation-free, cost-free consultation. Share details of your situation and concerns in confidence.
With expertise on your side helping analyse business debt relief options, ATO debt advice, and negotiate agreements, you can look forward again. Clarity, relief, and a brighter future for you and your business are only a few steps away – fill out the form below for your free consultation.
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