Early intervention and practical solutions in a changing restructuring landscape

Bitesize summary

• Irish businesses, especially SMEs, are under pressure from rising costs, limited credit access and stricter enforcement, leading to a steady increase in restructuring and insolvency activity.
• Early financial monitoring and action are critical, with directors needing to track cash flow, debts and operational warning signs to address issues before they escalate.
• While solutions like SCARP offer cost-effective restructuring options, low awareness remains a barrier, and ongoing economic challenges are expected to persist.

Introduction

Irish businesses are dealing with a period of financial pressure marked by increased costs, tighter access to credit, and greater regulatory enforcement. While economic conditions have remained relatively resilient overall, these factors continue to create challenges for many organisations, particularly SMEs and owner‑managed businesses. In this environment, early engagement and close financial monitoring are increasingly critical for directors.

These themes emerged in a recent Q&A Corporate Restructuring & Insolvency Survey in Business Plus, in which Declan Hanly, Partner, Corporate Restructuring at Crowe shared perspectives on recent activity levels, the importance of early warning tools and the issues most likely to affect clients over the coming year.

A changing outlook

Over the past 12 months there has been a steady, moderate increase in restructuring and insolvency‑related work. This has broadly mirrored economic conditions, with some sectors experiencing ongoing pressure from local and global factors. A significant driver of activity has been increased enforcement by the Revenue Commissioners, reflected in higher levels of Revenue‑led winding‑up petitions and a rise in creditors’ voluntary liquidations. In many cases, directors have taken a proactive approach, engaging with advisers in anticipation of potential enforcement action.

Early identification of financial stress remains central in this context, particularly in light of directors’ enhanced duties under the EU Preventive Restructuring framework. Timely management accounts, cash flow forecasts and realistic budgets continue to form the foundation of effective monitoring. In addition, attention is paid to wider indicators such as weakening debtor collections, increasing Revenue arrears, growing supplier pressure and operational challenges including staff turnover or the loss of key contracts. These signals can help directors identify difficulties early and act while restructuring options remain available.

The challenges facing Irish businesses

The survey underlines the particular challenges facing SMEs and owner‑managed businesses, which often operate with limited cash reserves and a high reliance on a small number of customers, lenders or suppliers. In that context, even modest disruptions can quickly place pressure on cash flow. Addressing these risks requires early engagement and a practical, proportionate advisory approach focused on workable solutions and commercial reality.

Legislative change continues to shape the restructuring landscape. The Small Company Administrative Rescue Process (SCARP) has been a welcome addition, providing a cost‑effective restructuring option for viable SMEs. Where suitable, SCARP has delivered strong outcomes, particularly when engaged with early. However, overall take‑up remains relatively low, pointing to the need for greater awareness and understanding of the process among businesses.

Looking ahead, cost‑of‑living pressures, geopolitical uncertainty, higher interest rates and tighter credit conditions are expected to continue to impact clients over the next 12 months, particularly in consumer‑facing sectors such as retail and hospitality. Crowe’s strategy remains focused on strengthening its corporate restructuring and insolvency practice, with an emphasis on early engagement and practical advice, while ensuring that formal processes are managed efficiently where businesses are no longer viable.

How Crowe can help

Crowe supports directors and business owners through all stages of financial difficulty, from early assessment and restructuring planning to formal insolvency processes where required. The firm’s focus is on delivering clear, practical advice and outcomes that seek to protect stakeholders and support informed decision‑making.