How much does small business restructuring cost?
Short answer
ASIC's Report 810 found a median restructuring practitioner fee of $21,998 for the whole process, with $20,001 to $30,000 the most common range. That splits into a fixed fee for the restructuring phase, median $16,137, and a smaller fee during the plan, median $6,739. On top sits the plan itself: what you pay creditors, typically around 20 cents in the dollar. Our small business restructuring guide covers the process.
The two fees
| Phase | How it is charged | ASIC median (2022 to 2024) |
|---|---|---|
| Restructuring phase: appointment to creditor vote, about 7 weeks | Fixed amount or agreed method, set by the directors' resolution when they appoint the practitioner. Usually paid up front by the company or director. | $16,137 |
| Plan phase: the payment period, often 1 to 3 years | A stated percentage of the payments made to creditors under the plan, deducted as they are distributed. | $6,739 |
| Whole process | $21,998 (average $23,843) |
The plan phase percentage is worth checking. ASIC found that in 78% of completed plans the practitioner took 15% or less of the dividends as remuneration. A practitioner proposing a much higher cut is asking creditors, and the ATO, to accept a smaller return, which weakens the plan's chances.
The bigger number is the plan itself
The practitioner's fee is the cost of the process. The cost of the outcome is what you agree to pay creditors, and that is usually larger. Completed plans in ASIC's data returned a median of 20 cents in the dollar to unsecured creditors, with 59% of plans paying between 15 and 25 cents. On the median unsecured debt in that sample, about $359,000, a 20 cent plan means roughly $72,000 paid over the life of the plan, on top of the fee.
The ATO is the creditor in the large majority of these cases and votes on the plan, so what cents in the dollar the ATO accepts is the number that drives your total, not the fee. Plan contributions come from future trading, from the director personally, or from a lump sum a lender or family member provides.
Is restructuring worth the cost for you?
A specialist can run the numbers against liquidation and a payment plan. Free, no obligation.
What pushes the cost up, and the cost of failure
- Catching up first. A company cannot start until tax lodgements are up to date and employee super is paid. Overdue BAS, returns and super are a real cost that sits before the fee.
- Complexity. Many creditors, disputed debts, related party loans, or a debt schedule creditors challenge all add time. An extension of the 20 business day proposal period adds more. How long does small business restructuring take covers the timeline.
- A rejected plan. If creditors vote no, the restructuring ends, the fixed fee is still payable, and every debt becomes due on the next business day. Many companies then go into liquidation, with a second set of costs. Compare the figures in how much does liquidation cost before you commit, and read SBR versus liquidation for which route suits which situation.
ONE ATTEMPT IN 7 YEARS
A company that has used restructuring or simplified liquidation in the previous 7 years cannot use it again, and neither can a director who was involved in one. Do not spend the fee on a plan that has little chance of passing.
What to do next
- Get lodgements and employee super up to date, because no practitioner can be appointed until they are.
- Ask two or three restructuring practitioners for a written quote showing the fixed fee, the plan percentage and what would change either figure.
- Model the plan honestly: what the business can pay each month for up to 3 years, plus the fee, against what liquidation would cost.
Related questions
Does the ATO or the government pay any of the SBR cost?
No. The company, or the director on its behalf, pays the fixed fee for the restructuring phase, and the plan phase fee comes out of the payments made to creditors. There is no government subsidy for restructuring, unlike the Fair Entitlements Guarantee that can cover some employee entitlements in a liquidation.
Can the practitioner's fee be paid by instalments?
The restructuring phase fee is set by agreement with the practitioner, and some will accept staged payments through the 7 week process. The plan phase fee is by design paid gradually, as a percentage of each distribution to creditors. Ask for the payment terms in writing before signing the appointment.
Is restructuring worth the cost for you?
A specialist can run the numbers against liquidation and a payment plan. Free, no obligation.
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