Small businesses that are struggling financially are one step closer to being able to avail of a new rescue process.

A bill passed all legislative stages in the Oireachtas yesterday, which will provide for a Small Company Administrative Rescue Process - known as SCARP.

This will be similar to the existing examinership framework, but aims to make the restructuring process quicker, easier and cheaper.

It is expected to be signed into law by the President in the next few days.

Sven Spollen Behrens, Director of the Small Firms Association said the bill offers small businesses with less than 50 employees a new dedicated rescue process.

Speaking on Morning Ireland, he described the process as an alternative to the traditional examinership process.

"If a small business finds itself in a situation where it is unable to deal with the amount of debt that has accumulated – but is otherwise viable, the directors of the companies concerned will be able to initiate this new process," he said.

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Unlike the examinership process, businesses availing of SCARP will not need to apply to the courts, as Mr Spollen Behrens explained.

"A qualified insolvency practitioner will be appointed by the company to begin engagement with the creditors to prepare a rescue plan.

"By day 49 of the insolvency practitioner's appointment, the creditors are then invited to vote on the rescue plan and the process will be concluded in a much shorter period of time than the traditional examinership process," he said.

Mr Spollen Behrens said examinerships can currently run for up to 150 days, whereas it is hoped this new process will be concluded within 70 days.

"The new framework will make the restructuring of a small business more accessible, faster, cheaper - and it will hopefully save a lot of businesses and jobs," he said.

The Small Firms Association said it expects many companies will avail of this new process once it comes into operation.

"The next 12 months are going to be so important for many small businesses, especially the thousands of businesses in the hospitality sector and the experience economy," said Mr Spollen Behrens.

"It is really important that businesses know that there will be a new framework in place that can help them if they need it," he said.

Mr Spollen Behrens said he hopes the new process will be in place for businesses from this Autumn.