The impact of the coronavirus crisis on Spanish SMEs is advancing despite the economic reopening. 26% of SMEs are experiencing liquidity problems . 8% have defaults with the Social Security and the Treasury. 14% find it difficult to pay rents, while 27% of businesses have delinquent clients. 13% of small and medium-sized companies are not paying their creditors and 10% are in default with financial institutions.
This is reflected in the September Barometer of the Administrative Managers. The report also highlights that 130,000 companies are in a situation of technical bankruptcy. In this way, only the bankruptcy moratorium prevents them from already having to file for bankruptcy.
The latest financial stability report of the Bank of Spain reinforces these data, indicating that it observes a notable increase in the risk of non-payment associated with ICO loans due to Covid. The volume of operations that have been classified by financial institutions under “special surveillance” has doubled to 16% . Debtors who, while still paying for their operations, show signs of weakness to be able to face the payment of their installments in the future are included in special surveillance.
“There is no recovery”
“We have been saying for many months that the micro recovery is not taking place , at least in all sectors, at the speed they want us to see; many SMEs had to over-borrow to meet payment commitments during the months that they were forbidden to sell or mobility was restricted, and they have not yet recovered their income levels, “says Fernando Santiago, president of the Administrative Managers.
“The Code of Good Practices, which has tried to be a relief for SMEs that have an ICO loan due to Covid has been nothing more than a new fiasco. The administrative difficulties on the part of the banks and the ICO for its management, have been part of the problem, but not the only one, “continues Santiago. ” They have left in the hands of the banks a large part of the operations to be renewed. Yes, after complying with the extensive framework of conditions established in the RD Law that regulates the Code of Good Practices, the SME or the self-employed did not have a fall of 30 % of income between 2020 and 2019, the bank decides whether or not it wants to expand. “
The president of the Administrative Managers points out that “we are encountering all kinds of problems . And if they are putting them in the extensions that should be automatic (even advising clients not to request the extensions), they can imagine in those that they are not. And the limit may be to have decreased sales by 20% “.
“And, worst of all,” says Santiago, “is the misinformation in the offices, centralized processes that bore anyone, but that for companies that do not have an administrative department make it almost impossible to materialize all the requests for information they receive. We have often endured forwarding the same documents three, four or five times. And, to top it all, each bank conducting the process very differently. “
Extend deadlines
“Governing gentlemen, extend the terms established in the Code of Good Practices, adapt the application conditions to the real conditions that SMEs and the self-employed are going through, oblige the banks to accept the extensions, all of them, without exception, since For something, it is the State that pays , and you, the banks and the SMEs and the self-employed, will find time to regain the pulse of their activity, “says Fernando Santiago. “The opposite, drowning the companies financially, will be a good business for the banks, which will end up receiving the funds from the State (70/80% of the amounts guaranteed) and a bad business for the country,” adds the specialist.
The president of the Administrative Managers concludes that “there are those who say that things will not be so bad when there are almost no requests for participative loans and write-offs”. However, he adds that “it is being impossible.”
The impact of the health crisis caused by the coronavirus was greater in SMEs with less financial literacy, at least in terms of employment and liquidity, according to a survey published by the Bank of Spain.