• Skip to content
  • Skip to navigation

Grant Thornton Australia

Grant Thornton uses cookies to monitor the performance of this website and improve user experience.

If you are happy to accept cookies from this site, please check the box.

To find out more about cookies, what they are and how we use them, please see our privacy notice, which also provides information on how to delete cookies from your hard drive.

How to be COVIDSafe when visiting Grant Thornton offices. Find out how

Global site
  • Global site
Grant Thorton Logo

Grant Thornton Logo Grant Thornton Logo

Contact us
  • Insights
  • Services
  • Industries
  • Meet our people
  • Careers
  • News centre
  • Locations
  • About us
  • Audit
  • Tax
  • Risk
  • Forensics
  • Deals
  • Finance and funding
  • Insolvency
  • Restructuring and turnaround
  • Business services
  • Consulting

  • Market services
  • Asia
  • Indigenous advisory
Audit Home
  • Compliance audits & reviews
  • Audit quality
  • Financial reporting advisory
  • Audit advisory
Tax Home
  • Corporate tax & advisory
  • Private business tax & advisory
  • Tax compliance
  • Employment tax
  • International tax
  • GST, stamp duty & indirect tax
  • Tax law
  • Research and development & government incentives
  • Data transformation and analytics
  • Corporate simplification
Risk Home
  • Payroll assurance
  • Cyber resilience
  • Internal audit
  • Financial crime
  • Consumer Data Right
  • Risk management
  • Controls assurance
  • Governance
  • Regulatory compliance
Forensics Home
  • Forensic accounting and dispute advisory
  • Investigations
  • Digital forensics
  • eDiscovery
Deals Home
  • Mergers and acquisitions
  • Acquisition search & strategy
  • Divestments
  • Operation deal services
  • Transaction advisory
  • Business valuations
  • Tax in mergers & acquisition
Finance and funding Home
  • Corporate finance
  • Debt advisory
  • Working capital optimisation
  • Capital markets
  • Capital raising
  • Private equity
  • Financial modelling
  • Payments advisory
Insolvency Home
  • Voluntary administration & DOCA
  • Corporate insolvency & liquidation
  • Complex and international insolvency
  • Safe Harbour advisory
  • Bankruptcy and personal insolvency
  • Creditor advisory services
  • Small business restructuring process
Restructuring and turnaround Home
  • Independent business reviews
  • Commercial performance
  • Safe Harbour advisory
  • Corporate simplification
  • Director advisory services
  • Debt advisory
Business services Home
  • Business planning & strategy
  • Private business company secretarial services
  • Outsourced accounting services
  • Superannuation and SMSF
  • Management reporting
  • Financial reporting
  • Forecasting & budgeting
  • ATO audit support
  • Family business consulting
  • Private business taxation and structuring
  • Outsourced CFO services
Consulting Home
  • Management consulting
  • Technology consulting
  • Financial consulting
Asia Home
  • China
  • India
  • Japan
  • Case study: Restructuring solutions
  • Agribusiness, food & beverage
  • Automotive dealers
  • Education
  • Energy & resources
  • Financial services
  • Health & aged care
  • Life sciences
  • Manufacturing
  • Not for Profit
  • Professional services
  • Public sector
  • Real estate & construction
  • Retail & consumer products
  • Technology & media
Agribusiness, food & beverage Home
Bite Size Dealtracker Food, Beverage & Agribusiness industry insights
Key insights for the Australian Food, Beverage & Agribusiness industry.
Financial services Home
  • Banking
  • Fintech
  • Private Health Insurance
  • Superannuation
  • Asset management
  • BEAR FAQs
  • Open banking
Royal Commission wrap up Top 10 things for Financial Services providers
Eleven months on from the first round of hearings for the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Commissioner Hayne’s final report has been released.
Health & aged care Home
Aged Care Royal Commission Perspectives on the Future of Ageing
Transitions in ageing are not consistent and systematic as they are described by our ageing systems. Sometimes they are incremental, sometimes accidental, sometimes monumental, and they are always personal. We can create something better.
Life sciences Home
Biotechnology Industry Position survey Australia's biotechnology industry drives economic growth
The 2019 Biotechnology Industry Position survey conducted by Ausbiotech and supported by Grant Thornton has revealed that new technologies across regenerative medicine and medicinal cannabis are disrupting the industry, and Australia's global strength in clinical trials continues to drive contributions to the economic and social fabric of the country.
Manufacturing Home
mid-sized business report Manufacturing is critical to our economy – how can we support the sector?
Although the knock-on effects of the Australian automotive industry exiting our country are yet to be fully understood, the industry is evolving, and manufacturing continues to be a major employer and critical to our overall economy.
Not for Profit Home
NATIONAL OUTCOMES MEASUREMENT PROGRAM A practical framework
Royal Commissions and federal budgets are critical things for Nonprofit human service providers to be thinking about at this point in time.
Real estate & construction Home
mid-sized business report Supporting affordable housing requires planning, certainty – and tax reform
There is a lot of noise around the property sector at the moment – and it’s not all positive. Prices are down – but this shouldn’t be a surprise when some markets (namely Sydney & Melbourne) saw unprecedented hikes in recent years.
Retail & consumer products Home
GNC Group Consulting The Technology Trap: Online innovation in retail
I recently attended the NRF Retail Big Show in New York, an overwhelming smorgasbord of retail technology and new store concepts.
Technology & media Home
  • Telecommunications
Scaling-up for Growth From start-up to scale-up
Navigating the complexities of growth and maintaining previous success is a challenge for all mid-size businesses.
  • Working at Grant Thornton
  • Student opportunities
  • Experienced careers
  • Contact us
Working at Grant Thornton Home
  • Flexibility
  • Your career and development
  • Diversity and inclusion
  • In the community
  • What we offer you
Student opportunities Home
  • Graduates
  • Vacationer Program
  • The application process
  • FAQs
  • Student application tips and tricks
  • Positions available
Experienced careers Home
  • Client spotlight
  • Positions available
  1. Grant Thornton Australia | Audit, Tax and Advisory
  2. Client alerts
  3. 2020
  4. What does the Small Business Restructuring Process mean for businesses and suppliers?

What does the Small Business Restructuring Process mean for businesses and suppliers?

16 Dec 2020
  • What does the Small Business Restructuring Process mean for businesses and suppliers?

On 1 January 2021, a new simplified small business restructuring process will become available for small businesses. 

The Treasurer Josh Frydenberg has announced these as the most significant insolvency reform in 30 years to support small businesses navigate the coronavirus-induced recession. On 10 December, these changes were passed in both Houses.

The Small Business Restructuring Process is designed to assist small businesses with liabilities under $1 million (representing approximately 76% of businesses currently subject to insolvencies) restore operational liquidity by severing the financial burden of legacy debts through a formal debt compromise with creditors.  In a first for Australian corporate restructuring, the reforms allows for Company Directors to remain in control of (‘debtor in possession’) and continue to trade their business during the restructuring period.

While the reforms may be welcome relief for companies with unmanageable legacy debts, the debtor in possession model itself and the introduction of a suite of moratoriums on enforcement activity present an increased risk to those supplying on credit to small businesses.

Qualifying for the SBRP

Companies wishing to utilise this process must be able to demonstrate the following:

  • less than $1 million in liabilities (excluding liabilities to employees of the Company);
  • all outstanding employee entitlements, including superannuation, must have been paid (nb. this does not include entitlements not yet due for payment, such as annual or long service leave); and
  • all tax lodgements for the company must be up to date.

To learn more about the specifics of the new process and your eligibility please click here.

What does this mean for suppliers?

If you are a supplier to small businesses, the reforms will mean the following should your customer enter into a SBRP:

  • The process is designed primarily to compromise debt rather than restructure the operations of a business and the profitability of a business’s underlying operations is unlikely to be materially improved as a result of the process. As such the ability of the business to demonstrate viability both during and following the restructuring period should be closely considered.
  • Unlike a Voluntary Administration, there is no personal liability assumed by the Restructuring Professional in relation to supplies made during the SBRP. As such, there is no certainty that you will be paid for goods provided on credit during this period.
  • Like a Voluntary Administration, suppliers are unable to pursue recovery of Retention of Title (ROT) claims during the restructuring period however the Restructuring Professional is not liable to account for the value of ROT stock sold by the insolvent entity during the restructuring period. This credit risk remains with the insolvent company. As such, a supplier with $100k worth of liquor stock in a restaurant on the day an SBRP commences, has no guarantee of payment for same.
  • The increased level of risk associated with a business subject to SBRP will likely result in a reversion to COD supply terms. The ability of the business to demonstrate funding sufficient to support continued supply and recapitalisation sources will be critical in determining whether the SBRP results in business failure rather than rescue.
  • Personal guarantees cannot be enforced against the Director during the restructuring period in relation to credit that has already been granted. Restructuring plans may run for up to 5 years and it remains unclear whether this moratorium applies for the duration of the restructuring plan, or the initial 7 week period.

Directors of qualifying small businesses should be aware that while on its face the SBRP may appear an attractive proposition, failure to properly consider key stakeholder concerns (funding continued supply, lender support and recapitalisation sources) prior to formally entering into a SBRP could result in business failure rather than rescue.

As Government support and stimulus measures are withdrawn over the coming months, suppliers should be conscious of the changing credit risk profile of its customers and potential erosion of recovery prospects under the SBRP reforms.

Key to optimising outcomes is early intervention. For more information on the SBRP please see:

  • Factsheet: Insolvency reforms to support small business (Australian Government)
  • How to access extensions to temporary restructuring relief (ASIC)
  • Information about entering Restructuring and the Restructuring Plan (ASIC)
  • Information on Small Business Restructures (ARITA)

To learn more about the SBRP or to discuss your specific circumstances, please reach out to your local partner or the contacts below.

For more information, please contact

Cameron Crichton
Cameron Crichton
Partner Brisbane
Email address https://www.linkedin.com/in/cameroncrichtongt/ Cameron Crichton VCard
View full profile
John McInerney
John McInerney
Partner Sydney
Email address https://www.linkedin.com/in/john-mcinerney-328624a/ John McInerney VCard
View full profile
Share this page
  • Share this page on Facebook LinkedIn
  • Share this page on Twitter Twitter
  • Share this page on LinkedIn LinkedIn
  • Share this page on Wechat WeChat
  • Share this page via email Email
  • Grant Thornton on Youtube
  • LinkedIn icon
  • Twitter icon
  • Facebook icon
Connectclose
  • Contact us
  • Locations
  • Meet our people
  • Subscribe
  • Staff portal
Aboutclose
  • About us
  • Careers
  • News centre
  • Client alerts
  • Grant Thornton Foundation
  • Grant Thornton Affinity
Legalclose
  • Privacy
  • Compliance and ethics
  • Disclaimer
  • Site map

© 2021 Grant Thornton Australia Limited – All rights reserved

    • EN
    • Contact us