The Azets SCARP Index released today has revealed that 1076 jobs have been saved since the rescue process for small and micro companies was introduced three years ago.
Marking its third anniversary, the Small Company Administrative Rescue Process (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.
The biannual research conducted by Azets Ireland reveals there have been 84 SCARP cases since the introduction of the scheme three years ago.
Of these cases, 70% have resulted in successful rescue plans, resulting in 1076 jobs being saved across 59 different businesses.
More than half of small business (55%) 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.
The Azets SCARP Index also provides an insight into the number of SCARP cases this year.
29 SCARPs have commenced in 2024, a decrease of 12% on last year’s figure. 382 jobs have been saved in 2024 as a result of successful SCARPs this year.
The hospitality (21%) and construction (21%) sectors accounted for the highest proportion of SCARP cases in 2024.
This was closely followed by the retail (17%) sector.
Among the businesses to have successfully undergone SCARP with the support of Azets advisors this year were HealthMatters, Showtime Analytics and Ecogas Limited.
Azets Ireland continues to be one of the leading providers of SCARP advisory services in Ireland, with 30 out of the 84 SCARP cases undertaken since the introduction of the scheme advised by restructuring experts at the professional services firm. SCARPs successfully concluded by Azets Ireland have resulted in 447 jobs being secured at small businesses around the country, which otherwise would likely have failed.
Commenting on the release of the SCARP Index, Dessie Morrow, Advisory and Restructuring Partner, Azets Ireland, said: “The SCARP process, now marking its third anniversary, has proven a beacon of hope for small businesses across the country facing financial hardship.
“With 1076 jobs saved since the inception of the scheme, it has proven invaluable in helping viable small businesses to restructure their debts and continue trading.
“A fall in the uptake of SCARP among small businesses this year could be a sign that the acute financial pressures faced by businesses may have eased somewhat.
“However, 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.
“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.
“Most notably, firms in the hospitality, construction and retail sectors have struggled to cope with the impact of rising costs.
“As more Irish business face financial distress over the coming months, it is important that they 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.
“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.”
To find out more about the Azets SCARP Index, visit www.azets.ie.