Scarp business rescue process saves 561 jobs in two year period
The report also found that the hospitality, construction, and advertising sectors accounted for half of all SCARP cases to date.
Some 561 jobs have been saved to date as a result of the rescue process for small and micro companies since its introduction exactly two years ago, according to Azets Ireland.
The professional services firm, formerly known as Baker Tilly Ireland, noted a “marked increase in demand” for Scarp in 2023 with expectations that this would continue into next year.
Aimed at small and micro companies, Scarp 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.
Some 50 small businesses have undertaken the Scarp process since its creation in December 2021, with 22 firms having gone through the process in 2022 while 28 Scarps have commenced so far in 2023, an increase of approximately 27%.
The report also found that the hospitality, construction, and advertising sectors accounted for half of all SCARP cases to date. Among the businesses to have successfully exited Scarp were Linen Bundle Europe, Airmid Health Group, China Sichuan restaurant Sandyford, Brasserie Sixty6 and Rustic Stone.
More than half of small businesses availing of the small business recovery process were located in Dublin while 74% were based in Leinster. Only 14% of cases involved small businesses based in Munster and 8% of the small businesses were based in Connacht.
To date, four restructuring professionals at Azets Ireland have acted as SCARP process advisers in 19 out of the 50 cases undertaken in the State to date. Of the 19 cases, rescue plans have been approved for 16.
“Scarp is needed now more than ever. In a time of lingering inflation, rising wages, higher interest rates and a slowing economy, many Irish small businesses are facing an extremely challenging environment," said Azets Ireland corporate recovery partner Dessie Morrow.
“With over 60,000 Irish businesses faced with having to pay back Revenue close to €2bn in warehoused debt in May next year, an increasing number of small businesses may need to restructure. Scarp is a vital tool in the armoury of small business owners who may encounter financial difficulty in the months to come.”
