Small Business Restructuring (SBR) was introduced in 2021 to give small businesses a streamlined way to restructure their debts while remaining in control of the business. However, one important limitation catches many people off guard: sole traders are not eligible for SBR.
SBR is only available to companies, specifically entities registered under the Corporations Act. Sole traders, partnerships, and trusts cannot access this particular pathway. This doesn't mean you're out of options, though.
If you're a sole trader facing financial difficulty, there are several powerful alternatives. Personal Insolvency Agreements (Part X), Debt Agreements (Part IX), informal creditor negotiations, and in some cases, converting your business structure to access restructuring options. The right path depends entirely on your specific situation.
We've worked with hundreds of sole traders over the years and there's almost always a path forward. The critical thing is getting the right advice before making any decisions that could limit your options down the track.
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