ASIC’s July 2026 review of voluntary administration outcomes is a useful reference point for practitioners advising SME clients under financial pressure. It reinforces a practical point we see regularly: voluntary administration remains a valuable restructuring tool, but the outcome is shaped by timing, preparation and the strength of the proposal put to creditors.
What the ASIC data shows
ASIC reviewed 5,020 companies that entered voluntary administration between 1 July 2021 and 30 June 2025, grouped into 3,528 appointments. The review found that voluntary administration now represents a smaller share of external administrations than it did historically, falling from around 35–40% in FY00–FY06 to around 10% in FY25 and FY26.
Almost half of voluntary administrations resulted in a deed of company arrangement (‘DOCA’). Larger appointments were more likely to produce a DOCA, while smaller appointments were more likely to end in liquidation, often without a proposal being put to creditors. For SME advisers, that is the key point. By the time many smaller businesses enter a formal insolvency process, there may be too little cash, stakeholder support or trading value left to restructure.
Where DOCAs were used, they served different commercial purposes. Some supported continued trading, some facilitated a sale of business or assets, and others operated as a compromise mechanism funded by directors or third parties. ASIC also found that third-party contributions and related party claim exclusions were common. In practice, successful DOCAs often depend on new money being introduced and related parties accepting that unrelated creditors should receive priority benefit.
Why this matters for SME advisors
The main takeaway for advisors is that early advice materially improves the available options. ASIC’s observation that smaller appointments often end in liquidation, and that winding up applications reduce the likelihood of a DOCA, is consistent with what we see in practice. Once a business has exhausted cash, lost supplier confidence, fallen behind on tax and superannuation, or allowed creditor pressure to become legal action, restructuring options narrow quickly.
A formal appointment needs a commercial pathway
Voluntary administration can deliver positive outcomes for SMEs where there is a credible pathway to preserve or realise value. That pathway might involve a sale of business, landlord or financier compromise, director or investor contribution, structured repayment proposal, or the preservation of profitable trading operations after legacy debt is compromised.
It should not be viewed simply as a way to pause creditor action. The moratorium is useful only if it gives the company time to develop a proposal that is better than liquidation. If there is no funding, no viable business, no buyer, no stakeholder support and no realistic capacity to trade profitably, the process may add cost without changing the outcome.
Funding quality is critical
ASIC’s report highlights a clear distinction between DOCAs funded by third-party contributions and DOCAs funded from future trading profits. DOCAs dependent on future trading profits generally took longer and were more likely to fail. A forecast-funded DOCA is only as strong as the assumptions behind the forecast, the management team delivering it and the business conditions that support it.
For advisors, this creates a practical due diligence lens. If a client is considering a restructuring proposal, the questions should go beyond whether it can afford a monthly contribution. Advisors should test the source of the contribution, how certain it is, what assumptions support it, what happens if trading underperforms, and whether creditors are being offered a demonstrably better return than liquidation.
Related party claims must be understood early
Related party claims are particularly relevant in the SME market, where shareholder loans, director loans, family loans and related entity balances are common. A DOCA that asks unrelated creditors to accept a compromise will often be more credible if related parties are prepared to subordinate or exclude their claims.
Advisors can add significant value before any formal appointment by ensuring related party accounts are reconciled, documented and commercially understood. That work helps clarify what is genuinely owed, what may be recoverable and what could be compromised to support a better outcome for unrelated creditors.
When to seek restructuring advice
Advisors should consider encouraging an early restructuring or insolvency consultation where a client has persistent ATO arrears, repeated payment plan defaults, unpaid superannuation, supplier pressure, margin decline, cash flow dependence on director funding, unreliable management accounts, loss of key customers, pressure from secured creditors, or any statutory demand, winding up demand or court application. ASIC’s review indicates that the DOCA success rate falls to 26% (from 45%) when the appointment is made within 90 days of a winding up application.
Early advice does not mean pushing the client into an appointment. More often, it means identifying options and putting contingency plans in place before an uncontrolled winding up becomes unavoidable. Those options may include informal workouts, safe harbour planning, refinancing, asset sales, cost reduction, business sale preparation, voluntary administration or small business restructuring. The right pathway depends on the client’s size, debt profile, stakeholder position and whether the underlying business can generate sustainable cash flow.
William Buck view
Voluntary administration can preserve value, facilitate a sale, deliver a better creditor return and give directors a pathway to restructure. But it is most effective when the business enters the process with enough time, reliable information and stakeholder support to produce a genuine proposal.
For SME advisors, the opportunity is to identify distress early and help clients engage with the right restructuring option before creditors dictate the path. The difference between a managed restructure and an uncontrolled liquidation is often not technical complexity. It is timing, preparation and a clear-eyed assessment of whether the business can be saved.
If you are seeing early signs of financial distress in an SME client, a confidential discussion with your local William Buck Restructuring and Insolvency expert can help clarify the available options.
