For many people, the words ‘Restructuring Plan’ immediately conjure images of large listed companies, high-profile administrations and complex, multi-million-pound legal proceedings. It has become widely accepted that Restructuring Plans (RPs) are simply too expensive and too complicated for the vast majority of SMEs.
But as Heather Bamforth, Director – Advisory Services, Opus Business Advisory Group, argues, that assumption deserves to be challenged.
Searching for the realistic alternative
The restructuring landscape has evolved significantly over recent years, yet many viable smaller businesses continue to dismiss restructuring plans before they’ve even explored whether one could work for them. The reason is rarely that the business itself isn’t suitable. More often, it’s because the process has developed a reputation for being prohibitively expensive.
The reality is that there are hundreds of SMEs across the UK with fundamentally good businesses, capable management teams and realistic recovery prospects. What they need is time, creditor support and a structured way of implementing change. Too often, they reach formal insolvency simply because they believe there are no realistic alternatives available to them.
Why are restructuring plans perceived as so expensive?
The reputation isn’t entirely undeserved.
An RP is a sophisticated legal mechanism that requires court involvement, detailed financial analysis, creditor engagement, valuation evidence and significant legal input. When used on large, complex cases involving multiple creditor classes and international stakeholders, those costs are entirely proportionate.
However, the market has naturally come to associate every restructuring plan with the largest and most complex examples.
In practice, not every business requires that level of complexity. Many SMEs have relatively straightforward debt structures. Their challenges often centre around a manageable number of key stakeholders, a limited creditor population and a business that remains fundamentally viable. Yet the perception remains that pursuing a restructuring plan inevitably means incurring costs that are beyond their reach.
The danger is that this perception becomes self-fulfilling. Businesses dismiss the option, advisers don’t raise it early enough, and opportunities to rescue viable companies are lost.
Should every restructure look the same?
This is where the profession has an opportunity to evolve. Protecting creditors and ensuring legal robustness must remain central to every RP. Those safeguards are fundamental to the success and credibility of the process. But that doesn’t necessarily mean every restructure requires the same level of complexity, the same process or the same associated cost.
Every business is different.
If a company’s capital structure is simpler, its creditor base is more concentrated, and the issues are clearly identifiable, it is reasonable to ask whether the delivery of the restructuring process can also become more proportionate.
This is not about diluting legislation or compromising the legal protections that underpin restructuring plans. The legal framework is one of their greatest strengths. The challenge is ensuring that those protections are delivered in the most efficient and commercially sensible way possible for the business involved.
Collaboration reduces complexity
One of the biggest opportunities lies in earlier and closer collaboration between advisers.
Too often, businesses seek advice only after their options have narrowed considerably. By that stage, issues have become more entrenched, creditor relationships have deteriorated, and the amount of work required has inevitably increased.
When turnaround specialists, lawyers and financial advisers are involved at an earlier stage, much of the groundwork can be undertaken in a coordinated and efficient way. Financial information can be prepared more effectively, stakeholder engagement becomes more constructive and potential obstacles can be identified much earlier, as everyone is working towards the same objective from the outset.
That doesn’t simply improve outcomes; it can also reduce duplication, avoid unnecessary workstreams and help manage professional costs more effectively.
For SMEs, where affordability is often one of the biggest barriers to seeking advice, that collaboration can make a significant difference.
Is it time for an SME ‘lite’ approach?
The phrase “SME ‘lite'” is deliberately provocative. It isn’t about creating a lesser restructuring plan, but more about creating a restructuring process that is proportionate to the size, complexity and needs of the business. Many SMEs simply don’t require the same level of procedural complexity as multinational groups or businesses with highly fragmented creditor structures.
If experienced advisers can identify opportunities to simplify delivery, improve coordination and remove unnecessary cost without compromising the integrity of the process, then more businesses should be able to access a restructuring solution that has previously been considered out of reach.
Ultimately, restructuring should be about solving commercial problems, not creating procedural barriers.
Earlier intervention creates better outcomes
Perhaps the most important shift isn’t procedural at all, but cultural. Many directors still view restructuring advice as something to seek only when every other option has failed.
By that stage, cash has often run out, creditor confidence has diminished, and the available options have narrowed considerably. The earlier businesses engage with experienced restructuring professionals, the more tools remain available. That isn’t simply true of restructuring plans. It’s true across the entire turnaround process. Early conversations create more flexibility, more options and, ultimately, a greater likelihood of preserving value for shareholders, employees and creditors alike.
Rethinking accessibility
Restructuring Plans have already demonstrated that they are an effective mechanism for rescuing businesses and preserving value. The next challenge is ensuring they are not viewed as a solution available only to the largest organisations.
If we genuinely believe that viable businesses deserve every opportunity to survive, then we should also be asking whether the way we deliver restructuring advice is evolving quickly enough to meet their needs.
The answer is not about lowering standards, but instead, about applying the same expertise, legal rigour and commercial judgement in a way that is proportionate to the circumstances.
Because saving a good business shouldn’t depend solely on whether it can afford the process designed to save it.
If restructuring plans can become more commercially accessible for SMEs while preserving the protections that make them so effective, the benefits extend far beyond individual businesses. More companies can be rescued, more jobs protected, better returns delivered for creditors, and, ultimately, a stronger and more resilient UK business landscape created.
