By B&T Advisory Team

After a demanding year for advisers and business owners alike, the consensus is clear: pressures are not easing, and for many small and medium businesses, the coming year may be even more challenging.

A Prolonged Post-COVID Hangover

While headline economic indicators may not signal a sharp downturn, many businesses are trading month to month, with the lingering effects of pandemic-era support still evident, particularly through legacy tax debts.

At the same time, cost pressures remain stubbornly high. Rising energy, labour, and rent costs continue to plague sectors that have struggled in recent years, including hospitality, transport, and construction.

Small Business Restructuring: Still Vital, But Harder to Achieve

Small Business Restructuring (SBR) remains a central feature of the insolvency landscape, but its role is evolving. After a slowdown in 2025 driven by tougher creditor behaviour, particularly from the ATO, there are signs SBR usage may rise again.

The shift we saw last year brought heightened scrutiny of a company’s tax compliance history and balance sheet ‘red flags’ such as director/related party asset loan positions. In practice, this has meant that proposals we would previously have considered a ‘good chance’ have been rejected.

If this approach continues, expected flow-on effects include:

• An increase in restructures and voluntary liquidations as a result of rejected SBR proposals.
• An increase in voluntary administrations / DOCA appointments as a workaround.
• Companies seeking alternative insolvency advice and strategies to deal with their tax liabilities.

Despite this shift, there is an expectation that restructures will again increase as a percentage of overall insolvency appointments. However, expectations must be realistic.

As we learned over the last year, the days of 15–20-cent-on-the-dollar dividends are long gone, even where businesses have genuine operations and a strong lodgement history. SBRs remain important and should be considered for most small businesses in financial distress when assessing their options.

Sydney and the Broader Economic Backdrop

In Sydney, these insolvency pressures are being amplified by global and domestic uncertainty. Uncertainty surrounding current world conflicts is dampening economic activity, while the likelihood of upcoming interest rate hikes is keeping consumers cautious.

Reduced discretionary spending is expected to affect the retail and entertainment sectors, and tighter credit conditions mean that domestic businesses will find it harder to secure lending, potentially resulting in foreclosure or outright closures due to unserviceable debt levels.

Cost Pressures, Credit Tightening, and Creditor Behaviour

Over the next 6–12 months, interest rates, costs, and creditor behaviour are expected to continue to shape insolvency activity.

Wages, rent increases, and electricity and gas costs are squeezing margins, while customers face reduced purchasing power.

Creditors are also tightening their stance. We hear that the ATO won’t be cutting back on firmer action any time soon and many clients are seeing their trade credit terms reduced and/or not approved in the first place.

The Critical Role of Lawyers and Accountants

Lawyers and accountants remain central to navigating financial distress. A significant proportion of our referrals come through lawyers and accountants, reflecting their role as trusted advisers.

Accountants are increasingly at the coal face with clients, with real-time access to financial data and the trust of business owners. We see many business directors get stuck looking at revenue (incl. GST) and can’t understand why their business is struggling. Accountants play a key role in reinforcing the view that profitability is everything.

Similarly, lawyers are often engaged early, particularly where disputes arise. As matters escalate, lawyers should engage with their clients on the risks of further escalation and its implications for the business’s solvency.

Rethinking Assumptions About Insolvency

One of the most important mindset shifts for advisers in 2026 is moving away from reactive thinking. Advisors need to be proactive rather than reactive.

There is also a need to challenge outdated assumptions. That insolvency is a failure or bad thing is one such belief. In reality, some viable businesses still struggle and need a reset, and a restructure or insolvency can help deal with legacy debt and provide a new beginning.

Early action matters. Early action reduces unnecessary stress and costs and, in most cases, affords the director more options, particularly while current restructuring regimes remain available.

Characterising the Landscape Heading into 2026

From our perspective, the insolvency and restructuring landscape heading into 2026 is defined by sustained pressure, heightened creditor scrutiny, and a narrowing margin for error. It will remain a busy period, likely busier than the prior twelve months, with the industry still catching up after COVID-19 and the Government measures implemented to protect businesses.

The notorious quiet period in December and January didn’t occur, in fact they were above average months for B&T Advisory and that will lead into a busy year ahead.

SMEs are doing it tough, often through no fault of their own, and outcomes will increasingly depend on early engagement, strong compliance histories, and realistic restructuring strategies. While insolvency is no longer viewed solely as an endpoint, the window for effective intervention is tightening – making preparedness, collaboration, and decisive action more critical than ever in 2026.

By Peter Biazos

As we come to the end of 2025, on behalf of the entire B&T Advisory Team, I want to extend my thanks and well wishes to our clients, referral partners, colleagues, and the broader professional community who have been part of our journey this year.

It has been a remarkably busy and fulfilling year, and probably one of the most dynamic we’ve experienced in recent times.

Across Brisbane, Sydney and the Gold Coast, our teams have navigated a challenging insolvency landscape with resilience, professionalism and empathy.

As small and medium businesses have felt the pressure of shifting economic conditions this year, we’re proud of the way our people have stepped up to support directors, advisors and stakeholders through some tough and very complex circumstances.

In 2025 we also celebrated some significant milestones for our practice:

• We expanded our Sydney presence with our new office opening in Martin Place, bringing our practical, people-first approach to even more clients and referrers along Australia’s east coast.
• We we’re recognised in the Insolvency Australia 2025 Rankings, placing 19th nationally and 5th in Queensland. These results highlight the trust our referrers and clients place in our team, and the quality of work our team delivers every day.
• We hosted a number of events and professional networking opportunities that highlighted our commitment to collaboration and community impact.  

These achievements would not have been remotely possible without the support of our clients, our trusted referrers, and our outstanding team.

Looking ahead to 2026, we are committed to providing expert guidance and thoughtful solutions – whether that’s early intervention, restructuring, or delivering formal insolvency appointments.

Thank you for your partnership and trust throughout 2025.

Wishing you and your families a safe, and relaxing holiday season.

All the best for the year ahead. We will see you in 2026!

By Peter Biazos

It’s been a buoyant year, undeniably one of the busiest I’ve ever seen in terms of the number of engagements. While we haven’t seen as many large matters towards the end of the year, small to medium-sized businesses have been doing it tough, as reflected in the statistics. Overall, it has been a genuinely busy year for most practitioners across the insolvency landscape.

Image Source: Alares.com.au October Insights 2025

We’ve also seen noticeable shifts in the types of businesses seeking help. Hospitality has been hit particularly hard, coffee shops, small takeaway stores, and similar operators have seen a real increase in appointments. Transport is another sector under pressure, especially trucking and freight. With petrol prices and other costs skyrocketing, many of these businesses simply can’t keep up. Hospitality and transport are undoubtedly the two most affected sectors this year.

Looking ahead, plenty is happening in the broader economic environment. From what I’m hearing, next year the ATO is gearing up to be even more “engaged”  than they’ve been this year.  

The focus isn’t only on major fraud cases, though those do exist, but more on businesses that simply haven’t paid. With $58 billion in outstanding debt, the ATO has a significant recovery task ahead. We’re seeing more appointments by the ATO, and they’re mostly run-of-the-mill businesses rather than high-profile cases.

Image Source: Alares.com.au October Insights 2025

In terms of engagements, there has been an increase in CVLs, while SBRs have slowed, especially since mid-year, likely down by at least 20%. The ATO has raised its expectations: where 20 cents in the dollar once passed, now proposals need to offer 30–35 cents. They’re placing far more scrutiny on cash-flow forecasts and long-term business viability. With that increased pressure, my view is more people will be returning to traditional restructuring strategies. I expect next year to lean more towards the older pre-pack restructure model rather than SBRs, particularly when there’s no guarantee a higher-cents-in-the-dollar offer will be accepted.

Image Source: Alares.com.au October Insights 2025

When we assess businesses, we draw on the full range of tools available – SBRs, CVLs, restructures – matching the right approach to each situation as it comes.

Looking back on the year, I genuinely believe B&T Advisory’s biggest achievement has been the team and the culture we’ve built to service our clients effectively. Bringing Sydney into the fold in June has been fantastic. We’ve created an environment where people are truly invested in the practice and the work they do. At our end-of-financial-year lunch, we flew the Sydney team up, and at the end of the day, one of our young staffers pulled me aside and said, “This feels like a family. It’s a family atmosphere.” That meant a lot. That’s exactly what we’re trying to cultivate. When people love coming to work and want to do good work, everyone benefits.

As for how accountants and lawyers can better prepare their clients for next year, they need to be proactive. Waiting until May for tax planning is no longer workable. The earlier an issue is identified and brought to us, the greater the chance we have of saving the business. Leave it too long, and the tax debt grows, the ATO loses patience, and options become limited. Early intervention is critical.

All in all, it’s been a strong year and the data backs that up, particularly the report from Insolvency Australia which recognised us as a top 5 Queensland firm and 19^th nationally on numbers. We’re proud of our achievements overall and look forward to building on it in the year ahead.

By Seth Cooper, Senior Insolvency Analyst

In the insolvency space, many formal appointments, such as liquidations and voluntary administrations, often end with the company’s deregistration. In most cases, that means the business closes permanently, employees lose their jobs, and creditors receive little or no return.

But SBRs are different; they help a company restructure its debt so it can keep trading and return to profitability with relief from legacy debt.
We are proud to have been appointed to 99 SBRs since inception, achieving an 85% success rate, which has saved companies a total of $21,398,219 and $18,648,137 in ATO debt alone. Through our work on SBRs, we have also recovered over $7,000,000 for the ATO.

It is likely that this money wouldn’t have been recovered if the various companies we worked with had entered into Liquidation instead of entering into the SBR.

In addition, these successful SBRs have also saved hundreds of jobs that almost certainly would have disappeared if the Companies had been liquidated.
It’s much more rewarding to see a company continue trading after struggling, and also to see money going back to the people who are owed it.

In liquidation, there are often few assets and limited recovery options, so creditors might get nothing. With an SBR, even though creditors agree to compromise their debts, they still receive money – on average, 30 cents in the dollar – where they might get no return in liquidation. Creditors also receive the benefit of keeping a customer and making profit from continued trade.