Guide · insolvency options

Small business restructuring, explained

Small business restructuring lets the directors of a company with total liabilities of $1 million or less stay in control while a registered liquidator helps them propose a plan to compromise its debts. There are 20 business days to propose the plan and creditors get 15 business days to vote on it.

Why a lender is writing this

Because a good proportion of the people who ring us should be talking to a restructuring practitioner instead, and nobody is served by us pretending otherwise. HomeSec does not provide this service and cannot advise on it. What follows is what the regime is, so you can have a better conversation with someone who does.

What it is

Small business restructuring is a formal insolvency process designed for smaller companies. Its distinguishing feature is that the directors stay in control: the business keeps trading, the directors keep running it, and a restructuring practitioner works alongside them to put a plan to creditors that compromises the company's debts. If creditors accept it, the company pays what the plan provides and the rest of the admissible debt is released.

That is materially different from voluntary administration, where control of the company passes to an administrator, and from liquidation, where the company stops.

Who qualifies

Condition	The requirement
Size	Total liabilities of the company must not exceed $1 million.
Employee entitlements	Entitlements that are due and payable must have been paid before the plan is put to creditors.
Tax lodgements	Returns, notices, statements and other documents required under taxation laws must have been given.
Company history	The company must not have been through restructuring or simplified liquidation in the previous seven years.
Director history	No director may have been involved in a restructuring or simplified liquidation in the previous twelve months, unless exempt.
Practitioner	A registered liquidator, appointed in writing by the directors. The appointment cannot be revoked.

Criteria as published by ASIC, checked 16 September 2026. General information only — eligibility for your company is a question for a registered liquidator.

The timetable

1
Appointment.The directors appoint a registered liquidator as restructuring practitioner, in writing. The restructuring begins.
2
Twenty business days to propose a plan.Extendable once, by no more than ten business days. The practitioner works with the directors on what the company can realistically offer creditors.
3
Fifteen business days for creditors to vote.From when the practitioner gives them the documents. Creditors accept or reject; the ATO is frequently the largest voice in the room.
4
The plan runs, or it does not.Accepted, the company pays what the plan provides and the balance of admissible debts is released. Rejected, the directors are back to the other options, having spent time and fees.

Throughout the restructuring, a creditor cannot enforce a personal guarantee against a director except with the leave of the court — one of the more valuable features of the regime for an owner who has guaranteed supplier accounts or equipment finance.

Restructuring, or borrowing?

This is the question this page exists to help you answer honestly, and the test is simple: is the problem the timing, or the total?

	The problem is timing	The problem is the total
What it looks like	The work is done and the money is coming. A claim, a debtor, a season, a settlement.	Debt accumulated over years that trading profits cannot service, whatever happens next quarter.
What fixes it	Funding the gap until the money arrives.	Compromising the debt, so the business starts from a number it can carry.
What borrowing does	Solves it.	Makes it worse, and adds your property to the problem.
Who to call	A lender.	A registered liquidator or your accountant.

If you read that table and recognise the right-hand column, the most useful thing this page can do is tell you to stop reading lender websites and get an appointment with a restructuring practitioner this week. Eligibility requires lodgements to be up to date and employee entitlements paid, both of which take time to arrange, so the delay is not free.

Where we do fit

Two places, and both are narrow. First, where the problem genuinely is timing — money that is coming, against a date that has already arrived. Second, afterwards: a business that has come through a plan with a viable operation and equity in property often needs working capital to rebuild, and at that point the ordinary assessment applies — the property, the purpose and the exit, with no financials required, which suits a company whose recent accounts tell a story its future does not.

If the number was not the whole problem

Restructuring and borrowing solve two different problems, and the difference is worth getting right: one is for a business carrying more debt than it can service, the other for a business waiting on money that is genuinely coming.

If you are reading this because money is tight, it may be that what you actually need is fast business finance — and HomeSec can lend with very few qualification criteria. All you need is sufficient equity in real estate and a business purpose: no financials, no valuation, no credit score threshold, funded in as little as 24 hours from a clean, complete scenario. Best of all, the first six months can come with no requirement to make any payment.

That's the HomeSec Advantage.

Questions people ask alongside this one

What is small business restructuring?

A formal insolvency process for smaller companies in which the directors stay in control of the business while a restructuring practitioner helps them propose a plan to compromise the company's debts. Creditors vote on the plan. If it is accepted, the company pays what the plan provides and the balance of admissible debts is released. It sits between doing nothing and appointing an administrator or liquidator.

Who is eligible?

The company's total liabilities must not exceed $1 million. Employee entitlements that are due and payable must have been paid, and tax lodgements must be up to date. Neither the company in the previous seven years nor any of its directors in the previous twelve months can have been through restructuring or simplified liquidation, unless an exemption applies.

Do I stay in control of my business?

Yes, and that is the central feature. Directors continue to run the company and can enter transactions in the ordinary course of business. Anything outside the ordinary course needs the restructuring practitioner's consent. That is very different from voluntary administration, where control passes to the administrator.

How long does it take?

There are 20 business days from the start of the restructuring to propose the plan, extendable once by up to 10 business days. Creditors then have 15 business days to accept or reject it. So the framework runs roughly six to eight weeks from appointment, which is fast as insolvency processes go.

Who can act as restructuring practitioner?

A registered liquidator. Directors appoint them in writing, and the appointment cannot be revoked once made. Choosing the right one matters — ask about their experience with businesses like yours and about what the whole process will cost before you appoint anyone.

Does it stop my personal guarantees being called?

During the restructuring, a creditor cannot enforce a personal guarantee against a director except with the leave of the court. That is a meaningful protection and it is temporary — it relates to the restructuring period, not to the rest of your life. What happens to guarantees afterwards depends on the plan and on the guarantee itself, and is a question for your adviser.

Does it deal with ATO debt?

ATO debts are generally admissible in a restructuring plan, and the ATO is frequently the largest creditor voting on it. Its attitude to a particular plan matters a great deal, and an experienced practitioner will know how to engage with it. Note the eligibility condition: lodgements have to be up to date before you can start.

What does it cost?

There are practitioner fees for the proposal stage and for administering the plan, and they vary by practitioner and by complexity. Ask for the full fee structure in writing before appointing, including what happens if creditors reject the plan. It is generally materially cheaper than voluntary administration, which is part of why the regime exists.

Is restructuring better than borrowing?

They answer different questions. Borrowing is right when the business is viable and the problem is timing — the money is coming and the dates do not line up. Restructuring is right when the business can trade profitably going forward but cannot carry the debt it has accumulated. If the debt load is the problem rather than the timing, adding a secured loan against your home makes your position worse, not better, and an honest lender will tell you so.

Can I do both?

Sometimes, and the sequence matters. A business coming out of a restructuring plan with a viable operation and equity in property may well need working capital afterwards. Borrowing to avoid a restructuring that the numbers call for is the version that goes wrong. Your restructuring practitioner and your accountant should be the ones advising on which you have.

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See if you qualify in sixty seconds

Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.

That's the HomeSec Advantage.

See if you qualify Call 1300 93 83 87Mon–Fri, 8:30am – 5:30pm Melbourne time

Other things business owners look up

Find your director ID Find your ABN or ACN Find your company's TFN Find your ATO payment reference If your ABN is cancelled Set up an ATO payment plan What a caveat on a title means What LVR means, with examples Get a copy of your rates notice Get a mortgage payout figure Do you qualify?Do you need financials?How long it takes Secured vs unsecured No credit check, honestly Check if a company is in liquidation What a business is worth Every guide

Reviewed by Paul Stone, Joint Chief Executive