There is still an extremely low uptake of SCARP (Small Company Administrative Rescue Process) and Examinership with both processes used only 43 times in 2025, which is around 5.3% of all corporate insolvencies. In 2024 the total number of SCARPs and Examinerships was lower at 41, just under 4.7% of all corporate insolvencies.
Around 20% of new businesses in Ireland fail within their first year. Many startups completed numerous funding rounds resulting in fragmented ownership structures which can be unattractive to potential new investors, especially for financially distressed companies.
A recent Scale Ireland survey shows that funding remains by far the biggest concern for startup founders and CEOs, with more than 80% of respondents saying it is “difficult” or “very difficult” to attract capital. Over the past several years various economic headwinds have caused some startups to not grow as planned, resulting in some experiencing financial difficulties which threaten their survival.
There will be some startups who are dealing with current or new potential investors who do not have the appetite to provide further capital or debt to a start-up which is facing insolvency. In these situations, Examinership or SCARP can provide a solution.
Examinership and SCARP are formal corporate rescue processes where an Examiner or Process Advisor is appointed to formulate a rescue plan to ensure the continued survival of insolvent companies.
An investor, through Examinership or SCARP, can acquire all or most of the share capital of the company. The investor(s) provide the capital needed to restructure the company’s debts and operations, thereby creating a more sustainable business. By investing through either of these processes investors can benefit from the company's preserved value, while protecting jobs. In essence, investors have a chance to acquire a potentially strong business at a significant discount.
Both Examinership and SCARP are known as positive actions taken by a company to ensure its survival and avoid liquidation. They are used frequently by investors to acquire financially distressed companies where the underlying business is viable, but it has not fulfilled its potential.
Both processes are also attractive to investors as the company will have a clean restructured balance sheet with debt and other legacy issues addressed through the rescue plan or scheme. The company will be in a much healthier financial position, and the rewards can be substantial for an investor who has acquired a potentially valuable business at a discounted value.
The burden of loss-making onerous contracts such as leases can also be removed through either process allowing the business to potentially thrive.
Investment in a company through these processes can be challenging given the limited due diligence that can be undertaken within a tight timeframe. This makes advanced planning before commencing either process more important, meaning a successful outcome is more likely.
Early action and specialist advice are important to explore what options are suitable to ensure the future survival of the company and avoid liquidation (closure). As time goes on, the chances of exploring restructuring options diminish, leaving less time for planning in advance of starting an Examinership and SCARP.
For too many otherwise viable companies, that delay proves fatal.
Content adapted from Business Plus.
