SBRP : A new lifeline for struggling businesses
with Trent McMillen , Partner at MaC Insolvency
Had a successful business that ’ s now struggling due to COVID ? Does all your hard work seem lost ? Has your debt reached a point where you think your business may not be able to trade its way back ? You ’ re not alone . Government data suggests up to 52 per cent of small businesses are experiencing financial distress .
Thankfully , new legislation designed to help the economy rebound out of COVID now makes it easier to save small businesses in debt distress , via a Small Business Restructuring Process ( SBRP ). This is a simplified and less costly way to restructure which moves away from the more intrusive pre-COVID formal insolvency processes . The SBRP allows directors to stay in control of their business whilst they undertake the restructure . In essence , it means you do not hand over everything that you have worked so hard for to a liquidator .
The process requires the following steps :
• The directors choose to commence the SBRP
• The directors , not a liquidator , keep trading the business during the process
• Within 20 days a restructuring plan is formulated and put to creditors
• Creditors / suppliers then vote on whether to accept the plan
It allows previously successful businesses that are now burdened with COVID-induced debt , to restructure their affairs quickly and transparently .
The great benefit is it deals with employee accruals , tax debts and supplier accounts all at once , so that business owners no longer have to juggle multiple bills with limited cash .
We are also seeing that creditors ( parties ’ owed money ) and banks are presently more receptive to working with businesses undergoing a restructure , than they were pre-COVID . This increased empathy is likely a result of their own financial pressures during the pandemic .
If you are a business owner experiencing financial distress and struggling to see the ‘ light at the end of the tunnel ’, the best thing you can do is seek professional help . There are now a growing number of business rescue options , such as a SBRP , which could assist you turn everything around .
If your business is distressed and you want to explore your options and obligation cost-free , please contact your friendly Hills District MaC Insolvency office on 1300 INDEBT .
We save businesses in debt distress . Every day .
LAW & ORDER
Motor vehicle accident claims
with Anthony McDonnell of McDonnell Schroder
When your car , or other property is damaged in a motor vehicle accident , if you are not insured , you have one of two options . You can either :
• Claim payment from the other party and sue if necessary , or
• Pay for your own repairs If the other party in the accident is insured , then you can :
• Make a claim on their insurance policy
• Pay the cost of the repair yourself
• Demand payment from the other party and sue them if necessary
In deciding what to do , an insured owner should consider a number of issues , including :
• What is the type of insurance policy ?
• How much excess is payable ?
• Will it affect your noclaim bonus ?
• Whether the other person is insured
• How the amount of damages they may receive will compare with legal costs
If you do have comprehensive insurance , it is generally best to let the insurance company handle an accident claim .
Going to court is expensive . Before suing for damages , it is important to check :
• Whether the other party is insured , and
• If the other party is not insured , whether they can afford to pay damages
There is no point in paying legal costs then finding that the other person simply cannot pay any damages ordered by the court . If this seems likely , then it may be better for you to claim on your own insurance .
If you need legal advice from a professional , contact McDonnell Schroder on 9622 1155 .
This article is written in a general nonspecific manner . Always contact your solicitor for specific legal advice .
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THE HILLS INDEPENDENT theindependentmagazine . com . au ISSUE 80 // FEBRUARY 2022 17