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As insolvency rates remain elevated, high uptake of the small business restructuring scheme has helped struggling firms keep their doors open, ASIC has found.
SBR appointments have surged as program awareness spreads, ASIC says
30 June 2025
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7 minute read
A new report by ASIC has revealed that small business restructuring (SBR) appointments have surged in recent years, rising from 448 appointments in 2022–23 to an estimated 3,000 in 2024–25.
“After a slow start, the recent growth of SBRs and other data in our report shows that the SBR regime is starting to deliver on the intended policy objective of reducing the complexity and costs involved in insolvency processes for small businesses and ultimately helping them to survive,” ASIC commissioner Kate O’Rourke said.
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In 2021, the federal government launched the SBR scheme to support small businesses in the wake of the COVID-19 pandemic. The initiative has provided businesses with a streamlined process to restructure their debts while remaining in control of the company, ASIC said.
Insolvency rates have steadily increased year on year since 2022 after the ATO resumed its regular approach to tax debt collection following a relatively lax period during the pandemic. In 2024–25, approximately 13,700 companies became insolvent for the first time, ASIC data showed.
The hospitality and construction sectors have been particularly hit hard by insolvencies in recent years.
In the financial year to 8 June 2025, there were 3,345 construction insolvencies, up 62 per cent from the 2022–23 financial year.
The hospitality sector has similarly seen a surge in insolvencies, with 2,316 recorded in the financial year to 8 June 2025. This was a 125 per cent increase from 2022–23 levels.
ASIC said that these embattled sectors have been the largest beneficiaries of the SBR scheme.
Approximately half of all SBR appointments came from the construction (27 per cent) and hospitality (23 per cent) industries, an ASIC review between 1 July 2022 and 31 December 2024 found.
Of the 3,388 total SBR appointments, ASIC said that 2,820 transitioned to small business restructuring plans while 568 were terminated after creditors rejected their proposed plans.
The scheme had seen $101 million in dividends distributed to unsecured creditors from fulfilled SBR plans, ASIC said. Approximately 87 per cent of those funds went to the ATO.
“We will continue to monitor the uptake of SBRs and their effectiveness. We are committed to ensuring that the SBR regime provides a cost-effective restructuring option that supports the survival of small business while minimising the risk of misuse,” O’Rourke said.
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