SCARP: Small Company Administrative Rescue Process Saving Irish Businesses in 2025
Small Company Administrative Rescue Process (SCARP) has become a vital lifeline for struggling Irish businesses. Introduced in 2021, SCARP offers a streamlined, cost-effective alternative to traditional examinership, helping small companies restructure debt while continuing operations.
Since its launch, SCARP has facilitated the survival of 59 businesses, saving over 1,000 jobs across Ireland, according to recent figures from Azets Ireland as air on RTE news. While the number of SCARP cases in 2024 decreased by 12%, the process successfully saved 382 jobs this year alone. Industries like hospitality, construction, and retail have been among the primary beneficiaries.
What is SCARP?
SCARP is a streamlined, out-of-court process intended for small companies experiencing financial difficulties. Unlike examinership, SCARP helps avoid lengthy and expensive court proceedings, allowing viable businesses to continue operating while they restructure their debts. This process was signed into law in Ireland on December 7, 2021, under the Companies (Rescue Process for Small and Micro Companies) Act 2021.
Key Features of SCARP
- Appointment of a Process Advisor: An independent advisor creates a tailored rescue plan.
- Debt Restructuring: The advisor works with creditors to consolidate and renegotiate debts.
- Job Preservation: The process prioritizes keeping businesses operational and safeguarding jobs.
How SCARP Works
- Initial Assessment: A business engages a licensed process advisor to evaluate its financial viability.
- Plan Development: The advisor prepares a rescue plan, including proposals for debt restructuring.
- Creditor Agreement: Creditors vote on the rescue plan. A simple majority is required for approval.
- Implementation: Once approved, the plan is implemented, allowing the business to stabilize and grow.
SCARP in Action: Recent Updates (2024)
- Job Preservation:
- Over 1,000 jobs have been saved since 2021.
- 382 jobs were saved in 2024 alone, despite a 12% drop in SCARP cases compared to 2023.
- Industry Focus:
- The hospitality and construction sectors accounted for 21% of SCARP cases in 2024, followed by retail at 17%.
- Regional Breakdown:
- Over 77% of SCARP cases were from Leinster, with 12% in Connacht and Ulster, and 11% in Munster.
Success Stories:
Companies like HealthMatters, Showtime Analytics, and Ecogas Limited have emerged stronger thanks to SCARP, demonstrating its effectiveness in providing real solutions for financial recovery.
Benefits of SCARP for Irish SMEs
- Cost-Effective: SCARP is significantly less expensive than examinership.
- Fast Process: The simplified approach reduces delays, ensuring businesses can stabilize quickly.
- Job Protection: Prioritizing continuity, SCARP safeguards jobs during restructuring.
- Tailored Solutions: Rescue plans are customized to the unique financial needs of each business.
Eligibility for SCARP
To qualify, a company must meet these criteria:
- Employ fewer than 50 employees.
- Have an annual turnover below €12 million.
- Be deemed viable but unable to meet its current debt obligations.
Challenges and Future Outlook
While SCARP has proven effective, a 12% drop in cases this year may signal easing financial pressures for some businesses, according to Azets Ireland. However, challenges remain as rising costs continue to affect key sectors like hospitality, construction, and retail.
As more businesses face financial distress in the coming months, raising awareness about SCARP and its benefits is crucial. Both SCARP and examinership remain indispensable tools for preserving jobs and ensuring economic growth.
