Over 1,000 jobs have been saved through the Small Company Administrative Rescue Process (SCARP) since it was launched three years ago, new figures show.
The scheme aims to facilitate simplified out-of-court debt restructuring for small businesses deemed to be viable.
A process adviser is appointed under the scheme to prepare a rescue plan and to work with creditors to consolidate company debts.
According to figures published by Azets Ireland, 84 SCARP cases have been undertaken since the introduction of the scheme in December 2021.
Of these cases, 70% have resulted in successful rescue plans, resulting in 1,076 jobs being saved across 59 different businesses.
So far this year, 29 SCARP cases have commenced, down 12% on last year.
Despite this fall, 382 jobs have been saved so far in 2024.
Speaking on Morning Ireland, Dessie Morrow, Advisory and Restructuring Partner at Azets Ireland said the fall in uptake this year could be a sign that financial pressures faced by businesses may have eased.
However, he said there is also likely a seasonal factor at play.
“Many struggling businesses may manage to trade through the busy festive season until the slower months of the first financial quarter,” he explained.
“From the elevated cost of energy to rising labour costs, the rising cost of doing business looks set to continue across the economy over the coming months, creating significant financial headwinds for small businesses,” he added.
Today’s data shows that the hospitality and construction sectors accounted for the highest proportion of SCARP cases in 2024 – both at 21%. This was closely followed by the retail sector at 17%.
Meanwhile, more than half of the small businesses availing of SCARP were based in Dublin, while 77% were based in the wider Leinster region.
11% of businesses availing of SCARP were based in Munster, followed by 12% in Connacht and Ulster.
With more Irish business likely to face financial distress over the coming months, Mr Morrow of Azets Ireland said it’s important that companies are aware of all the available options to manage these difficulties.
“Increasing awareness among business owners and professional advisors of SCARP and examinership is crucial to protecting and securing the future of these firms,” he said.
“By providing business with real solutions to financial difficulties, both SCARP and examinership are vital restructuring tools which can offer a pathway to financial recovery, preserve valuable jobs in Irish businesses and support economic growth in communities around the country,” he added.
Article Source – 1,076 jobs saved due to SCARP over past three years – RTE