The Guide to Small Business Restructuring Plans

Small Busines Restructuring Plans

Small Business Restructuring Plans: What you need to know?


Small business restructuring plans is a strategic approach designed to help struggling businesses regain their financial footing while avoiding the burden of bankruptcy. This process was further streamlined and enhanced in 2021 with the introduction of the Small Business Restructuring Plan (SBRP) in Australia. 

Small business restructuring plans offer a lifeline to small businesses facing financial distress, enabling them to restructure their operations, reduce debt, and continue trading

Why Restructure?

  • Debt Reduction: Small businesses often find themselves burdened by overwhelming debt, which can stifle growth and even lead to financial ruin. Small Business Restructuring Plans (SBRPs) provide a lifeline for these businesses. By engaging in negotiations with creditors and developing a clear repayment plan, businesses can significantly reduce their debt load. This debt reduction not only lightens the financial load but also relieves the constant pressure of meeting heavy debt obligations. With fewer financial liabilities, businesses can redirect their resources toward critical areas such as innovation, expansion, and employee welfare, ultimately fostering growth and sustainability.

  • Operational Efficiency: Efficiency is the cornerstone of any successful business. However, over time, inefficiencies can creep into an organization, leading to wasted resources and increased costs. Small business restructuring is an opportunity to hit the reset button. It involves a meticulous examination of every aspect of the business, from processes and workflows to staffing and technology. By identifying and eliminating inefficiencies, restructuring can lead to a leaner and more streamlined operation. This optimization not only reduces costs but also enhances productivity and competitiveness. As a result, businesses can adapt more swiftly to market changes and deliver better value to their customers.

  • Preservation of Business: Perhaps one of the most critical objectives of small business restructuring is the preservation of the business itself. Small businesses are the lifeblood of communities, providing employment opportunities and contributing to the local economy. When these businesses face financial hardships, the consequences extend far beyond balance sheets. Restructuring aims to keep the business operational, safeguarding jobs and livelihoods for employees and their families. It also maintains valuable relationships with customers and suppliers, ensuring continuity in the provision of goods and services. Moreover, the integrity of the brand remains intact, preventing long-lasting damage that may occur in the event of bankruptcy. Small business restructuring, therefore, serves as a means to protect not just the business but also its broader impact on society.

Small Business Restructuring Plans 

The debt restructuring plan explains how a company will pay its creditors if the plan is approved. It might describe whether creditors will get a part of what they’re owed or a certain percentage of the total debt. Alongside this plan, there is a restructuring proposal statement. This statement includes a list showing who the company owes money to and how much they owe to each creditor.

Maintaining Control During the Small Business Restructuring Plans

When your business enters the restructuring process, it’s important to know that you’ll still be in charge. Here’s what happens:

  • You Stay in Control: Your company continues to run things as usual. You can carry out everyday business transactions without any major disruptions.

  • Debt Restructuring Plan: You’ll work on Small Business Restructuring Plan to manage and reduce your debts. This plan outlines how you’ll pay back what you owe. It’s a crucial part of the process.

  • Restructuring Proposal Statement: Alongside the debt plan, you’ll also put together a statement. This statement lists all the people or companies you owe money to and how much you owe each of them. It’s like a clear record of your debts.

  • Counsel and Guidance: Throughout this journey, you won’t be alone. A small business restructuring practitioner will be there to assist you. They’re professionals who specialize in helping businesses like yours through this process. They provide valuable advice and support.

Remember, even though you’re going through a restructuring process, your business remains under your control. You’re taking proactive steps to manage your debts and work toward a more stable financial future. This process is designed to support you and your business, helping you navigate through challenging times while preserving your business’s integrity.

How Short-Term Business Loans Can Help the Small Business Restructuring Plans 

While the Small Business Restructuring Plan provides a structured framework for restructuring, accessing capital can be a critical challenge for businesses in distress. Short-term loans can be a lifeline in this scenario, offering the necessary financial support to implement the restructuring plan effectively.

  • Immediate Liquidity: Short-term loans provide quick access to capital, allowing businesses to address pressing financial needs, settle outstanding debts, and keep operations running smoothly during restructuring.

  • Flexibility: These loans often come with flexible terms, which can be tailored to the specific needs of the business. This adaptability is essential when navigating the uncertainties of restructuring.

  • Working Capital: Short-term loans can boost working capital, helping businesses cover day-to-day expenses, invest in growth opportunities, and maintain a positive cash flow during the restructuring process.

  • Bridge to Recovery: For businesses with strong growth potential, short-term loans can serve as a bridge to recovery, enabling them to emerge from restructuring stronger and more competitive than before.

Navigating the Restructuring Process

  • Assessment: Start by conducting a comprehensive assessment of your business’s financial health and identifying areas that need attention. Seek professional advice if necessary.

  • Create a Plan: Develop a robust restructuring plan that outlines your goals, strategies, and timelines. Ensure it aligns with the requirements of the SBRP.

  • Access Financing: Explore short-term business loans that fit your needs. Work with financial experts to secure the most favorable terms and interest rates.

  • Implementation: Execute your restructuring plan diligently, making necessary adjustments along the way as circumstances evolve.

  • Monitor Progress: Continuously monitor your progress, keeping a close eye on financial metrics, and be ready to adapt your plan as needed.

How can Secured Lending Help?

Small business restructuring plans in Australia provide a lifeline for struggling enterprises to regain their financial footing and continue contributing to the economy.

Short-term business loans play a crucial role in supporting these plans by providing much-needed capital flexibility. If your small business is facing financial challenges, don’t hesitate to explore the benefits of restructuring and consider short-term business loans as a viable solution on your path to recovery and success. Consult with financial experts and leverage the available resources to ensure a smooth and successful restructuring journey.

Secured Lending understand the complexities of Small Business Restructuring Plans for businesses and the potential benefits of short-term loans. Our experienced team is here to guide you through the process  and helping you explore suitable financing options to address your debt effectively. 

Our loan products are designed to provide short term relief in circumstances where funding is not immediately available from traditional sources of finance, such as banks and other first tier institutions. These include:

We aim to implement our solutions as a matter of priority so that you can resume business as usual, with full control of your company.

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Small Business Restructuring Plans
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