Rise In Number Of Small Firms Using Rescue Scheme Scarp, Experts Say
A scheme set up during the pandemic to help small businesses survive the ongoing volatile economic environment experienced its busiest period last week, as it rescued six firms from insolvency, retaining 23 jobs.
Rise In Number Of Small Firms Using Rescue Scheme Scarp, Experts Say
The Small Company Administrative Rescue Process, or Scarp, aims to facilitate simplified out-of-court debt restructuring for small businesses deemed to be viable through advisors such as Baker Tilly.
Rise In Number Of Small Firms Using Rescue Scheme Scarp, Experts Say
“With growing wage costs, high inflation, and rising interest levels, small Irish businesses face a challenging and rapidly-evolving environment that will reduce their operating margins,” said Dessie Morrow, corporate restructuring director at business advisory firm Baker Tilly.
Rise In Number Of Small Firms Using Rescue Scheme Scarp, Experts Say
Rise In Number Of Small Firms Using Rescue Scheme Scarp, Experts Say
Baker Tilly assisted the six firms that exited the Scarp scheme in the past week and among them were three companies behind the Entertainment.ie platform, including Sortridge Limited, Entertainment Media Networks, and Castleforbes Investments.
Rise In Number Of Small Firms Using Rescue Scheme Scarp, Experts Say
Digital marketing company Socio Local, online jewellery retailer Lilywho, and Dublin-based mechanical services and tyre sales provider Total Tyres & Accessories also completed the rescue process this week.
Rise In Number Of Small Firms Using Rescue Scheme Scarp, Experts Say
“Whilst I wouldn’t wish anyone to be in the position of needing Scarp, it is designed for companies with a real viable business but with historic debt they can’t outgrow,” said Michael Nolan, CEO of Socio Local.
Baker Tilly said 356 jobs have been saved, with 16 viable small businesses used the Scarp scheme since it was created by the State in December 2021.
There has been a strong increase in the use of Scarp over 2022, according to research by Baker Tilly, which has worked with most of the Scarp cases in the last year.
“Its introduction also addressed the absence of a cost-effective restructuring process for certain small or micro businesses,” said Mr Morrow.
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