Transcript

There are a couple of pitfalls to be aware of before you enter into the small business restructuring process, and the things that you should be talking with your potential restructuring practitioner about before you commence the process. 

One of the key things is you need to look at how you're going to trade through the process, and in particular, what credit you need access to through that process because there are a number of suppliers, especially in the construction industry, who will restrict credit accounts while you're going through the process.

So, you need to be able to continue to trade through the process, and so you'll need to make plans that either have cash aside to do cash on delivery or look at alternative accounts who aren't going to cut you off through that period. Also, some credit cards, in particular American Express, will close your account if you're entering into small business restructuring, and that can be a problem for businesses. 

There's also the publicity aspect. Everyone knows it's publicly published on the ASIC register, and that can have issues for contracts for certain businesses. So, these are just considerations that you need to look at and make sure that you've thought about, you've discussed with your restructuring practitioner, and you've got a plan to deal with before you start the process.