Business:
Cabinet Maker
Restructure Support Provided:
ATO Small Business Restructuring (SBR) Scheme
The Challenge
The COVID-19 pandemic brought ripple effects across many industries, and the construction downturn hit one of our long-time cabinet-making clients especially hard.
With fewer new builds and renovations, and the increase in costs, their orders dropped significantly. Despite doing everything possible to keep the business afloat, they operated at a loss for several years. Over time, unpaid tax and GST obligations added up—leaving them with a debt of $400k+, the majority of which was owing to the ATO, and rising stress levels.
How We Helped
At Trident Financial, we stepped in to provide practical solutions and strategic advice during a difficult time.
We worked closely with the client and a registered restructuring practitioner to implement the ATO Small Business Restructuring (SBR) Scheme—a pathway introduced to help financially distressed, but viable, small businesses avoid insolvency.
This scheme allows businesses with under $1 million in liabilities to negotiate with creditors and pay a reduced portion of their debt—$0.1879 on the dollar—while continuing to trade without having to go through a formal liquidation process.
With careful planning and collaboration, we helped:
- Prepare the financials required for the restructuring plan
- Connect them with a Restructuring Practitioner, who communicated with creditors and the ATO to negotiate terms
- Ensure the business met all eligibility requirements for the SBR scheme
- Liaise between the restructuring practitioner and the client to keep things moving smoothly and transparently
The Outcome:
The restructuring plan was accepted by creditors, and we successfully reduced the client’s $415,021 debt to just $86,800—a saving of over $328,000.
Most importantly:
- The client avoided liquidation or bankruptcy
- They were able to retain control of their business and continue to operate
- Their financial future is now on a much more stable footing
