Small Business Restructuring Proving to be Highly Effective
Adoption of the Small Business Restructuring (SBR) process is continuing to increase.
There were 57 new SBR appointments in June 2023 which was a 167% increase over the 21 appointments in the same month in 2022.
In 3 out of the 6 months so far in 2023, Small Business Restructuring has saved more businesses than the old Voluntary Administration to Deed of Company Arrangement process.
SBRs are successful in forming a deal far more commonly than Voluntary Administration. Over the last 12 months, there were 333 successful SBR plans compared to 447 SBR appointments, which is 74%. Whereas there were 1,303 VAs, and only 514 DOCAs, which is 39%.
If you (or your client) is on an ATO Payment Arrangement or tried for a Payment Arrangement and were denied, you should be looking at an SBR instead.
Don’t struggle to pay the debt in full when the ATO is a big supporter of accepting around 15-20% in full settlement under a Small Business Restructuring (SBR).
It might sound too good to be true. It’s not! It is little understood, under-appreciated and under-utilised new legislation. Here is what the ATO said:
“The ATO’s focus is on assisting eligible businesses to access Small Business Restructuring where possible and where appropriate. Where we have been a creditor, we have supported most Restructuring Plans”.
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