The SCARP Process in Ireland

The SCARP process in Ireland provides a rescue option for small companies in financial difficulty. Many businesses experience temporary financial pressure. Rising costs, economic changes, and unexpected events can all affect cash flow. The SCARP process gives viable companies a structured way to restructure their debts while continuing to trade.

Our business advisory services can help businesses by giving practical guidance during challenging periods. We help companies explore restructuring options that may support long-term recovery.

What is The SCARP Process in Ireland?

SCARP refers to the Small Company Administrative Rescue Process. It was introduced in 2021 to help financially distressed small businesses that still have the potential to survive.

The SCARP process allows a company to restructure its debts with the help of an independent Process Advisor. This advisor reviews the company’s financial position. They then prepare a rescue plan for creditors. The goal is to allow the company to avoid liquidation and continue operating.

Small businesses play a major role in the Irish economy. According to the Central Statistics Office, small enterprises make up more than 99 percent of all companies in Ireland. Because of this, the SCARP process in Ireland is an important support for businesses and employment.

Who Can Qualify?

The process is designed for small and micro companies that meet certain financial thresholds. A business must meet at least two of the following conditions:

• Annual turnover of less than €12 million
• A balance sheet total of less than €6 million
• Fewer than 50 employees

The company must also be insolvent or likely to become insolvent. However, there must still be a reasonable prospect that the business can survive.
Directors must believe that the company can continue trading if its debts are restructured. This assessment is an important part of deciding whether the SCARP process in Ireland is suitable for the business.

How the Process Works

The SCARP process begins when the company directors appoint a Process Advisor. This advisor reviews the company’s financial information. They assess whether the business has a realistic chance of survival.

If the company qualifies, the Process Advisor prepares a rescue plan. This plan outlines how debts may be reduced or repaid over time. Creditors then review the proposal and vote on it.

If the required majority of creditors approve the plan, it becomes binding. The company can then continue trading while operating under the terms of the rescue arrangement.

Throughout the process, companies must meet certain regulatory requirements. Guidance from Revenue and Gov.ie helps directors understand their responsibilities.

Why Early Advice Matters

Financial challenges can escalate quickly. Seeking professional advice early can give businesses more options. The SCARP process in Ireland is designed to help viable companies recover. However, directors must act promptly to take advantage of it.

At Cronin, our business advisory team works closely with company directors. We help assess financial viability and explain available restructuring options. We also support businesses in understanding their obligations during a recovery process.

If your company is experiencing financial pressure, professional guidance can help you make informed decisions. Explore our website to learn more about how our business advisory services can support your business.