When the Small Business Restructuring (SBR) framework was introduced, it promised to be a simpler, faster way for struggling small businesses to deal with unmanageable debts while staying in control. For a period, it was just that. But the environment has matured, and with it, so have creditor expectations.
Now that we're in the back end of 2025, SBRs are no longer an automatic solution. Creditors, including the ATO, have seen enough failed restructures to become far more selective. The message is clear: debt relief without substance won’t pass. Businesses now need to demonstrate that they are worth saving.
From Relief Tool to Reality Check
SBRs were designed to help viable businesses reset their debt and move forward. Yet they started to generate a reputation for being a "quick fix" for deeper issues. This wasn't helped by a flood of pop-up advisors promising to "wipe tax debt fast" without addressing why the business fell behind in the first place.
Inevitably, this transactional approach gradually eroded trust in the process and led creditors to tighten their stance.
In response:
- The ATO now demands substance. They are no longer supporting proposals without proof of improved cash flow, governance, and tax compliance.
- Creditors are voting with caution. They expect to see clear evidence that the company can meet its future obligations.
- Credit risk assessments have evolved. Many lenders and suppliers are flagging SBRs in trade and credit reporting systems, creating downstream issues for finance and trading accounts.
- Short-term fixes no longer work. An SBR might deal with debt, but it does not fix cash flow gaps, pricing models, or operational inefficiencies.
What used to be a relatively predictable outcome is now a gamble that only succeeds if the business can back its plan with data, discipline, and evidence of genuine improvement.
The message for directors is simple: a successful restructure now relies on credibility, not convenience.
At Thryvv, we are helping directors prepare for this new reality by building credible business cases that stand up to scrutiny and demonstrate that the business can deliver.
How SBRs Should be Viewed
The good news is that creditors still want to support businesses that are trying to do the right thing. What they are looking for has changed, but it is achievable.
To win creditor confidence, directors must show:
- A sustainable business model with realistic financial forecasts
- Improved financial controls and decision-making discipline
- Visible governance that proves the director is in control
- Transparency and accountability, backed by reliable reporting
- A genuine attempt to do the right thing, demonstrated through clear communication, timely engagement, and responsible management
When directors show they are acting with integrity and taking recovery seriously, creditors, including the ATO, respond in kind.
The Right Way to Approach SBRs
At Thryvv, we have always approached restructuring as a process of transformation, not transaction. When a director comes to us, we start by understanding the cause of distress, not just the size of the debt. Our team works to:
- Rebuild financial systems and governance structures
- Model short-term recovery and long-term viability
- Develop clear, evidence-based business cases for creditor support
- Engage with the ATO and key suppliers early to build trust
This approach takes more time, but it creates genuine recovery, builds creditor confidence, and protects the director in the process.
The Bottom Line
SBRs have entered a new era defined by scrutiny, substance, and accountability.
For directors, this is not bad news. It is an opportunity to reset with integrity and rebuild credibility in the eyes of creditors, staff, and the market.
At Thryvv, we stand beside directors who are making a genuine effort to do the right thing. We help them prove their business is worth saving, not just on paper, but in practice.
Real recovery does not start with forms. It starts with control, strategy, and the courage to rebuild with substance.
Think an SBR could be right for you?
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