According to Fedecom, most SMEs can only last one more month

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“We have decided that from April 1 we lower the social security contributions to 50 percent, we will go to work four hours a day. We have not had sales for more than 20 days because the candy item is totally suffocated ”.

The speaker is Alberto F., a Mipyme-level manufacturer and distributor that already observes the limit of its activity on the near horizon. As seen by other 900 merchants, industrialists and service providers who responded to a survey by the Commercial Federation of Córdoba (Fedecom), released yesterday.

The work – carried out between March 20 and 30 – revealed that almost a third consider that it will be able to continue operating in the current emergency context until the end of April. Another 27 percent, the most “comfortable”, stretches that period until the end of May, but 22 percent estimates that the end of the film will take place just after Easter.

Lack of sales, rejected checks, the impaired payment chain and difficulties in accessing bank financing or official aid programs are the most mentioned situations.

Regarding the fall in demand, the survey indicates that the decrease is between 83 and 90 percent for the three areas: commerce, industry and services.

“We do not sell, we cannot collect current account invoices and suppliers call us for overdue invoices, that is the picture,” adds Alberto, who at this time of year should be starting his seasonal demand cycle.

Ezequiel Cerezo, president of Fedecom, clarifies that some of the responses were known before the official aid decree was announced, but that does not change the prospects because the processing of benefits (Repro, a partial aid for wages or credits) leads weather.

Deadlines

65 percent of the responses correspond to businesses. In this universe, a third replied that it could continue to function for between two weeks and one more month; Another third narrowed that deadline to two weeks, with the rest saying it could come in mid-May.

“I think April 13 is the most we can hope for. Now some money was coming in for credit card sales in February and March. Selling a property or a vehicle is difficult at this juncture, ”explained Alfredo Sánchez, owner of a tire business.

Another 25 percent of respondents are in the service sector. In that segment (with a lot of labor), 27 percent calculated that they could remain active for two more months. Another 23 percent cut the deadline to one month and 21 percent to just a couple of weeks.

A clear case in this area are service stations. Gabriel Bornoroni, president of the federation of the sector, Fecac, explained that these vents and parking spaces were outside Decree No. 332 as they were considered essential.

“In both activities we have a 95 percent drop, and for us it has been problematic since last month. We are not able to pay the salaries, the utility bills keep coming and the providers want to collect, ”he explained.

Under the ships

Industry appears in this crisis picture. 40 percent estimate that it will last a month, but it is not safe. “All the contingent liabilities, which are all third party checks, I have passed to suppliers, banks and mutual guarantee companies. If 100 percent of those checks come back, they get back to us in 15 days. Now, if 20 percent comes back, I can spend the month taking a single credit for wages, ”said Mario Martoglio, a multi-line metalworker.

In the survey, 28 percent estimated that its manufacturing activity will continue for 60 days, while 17 percent narrowed to two weeks.

Salvador loan

The Fedecom survey also asked what measures business women and men would appeal to deal with the most extreme contingency. Half admitted that they would go to take a bank loan. Dividing the answers according to the sectors, 54 percent of merchants, 48 ​​percent of industrialists and 45 percent of SME entrepreneurs opined in this way. But there the commercial entity noted that the proportion of firms considered a subject of credit in the province is very low.

57 percent of commerce, 69 percent of service firms and 50 percent of industries do not qualify for a bank loan on their own, according to the Fedecom poll.

In that perspective, few merchants (just six percent) and industrialists (13 percent) said that reducing employees is an extreme alternative.

Does not enduring the crisis imply closing? In some cases yes, but in others no. For these, the return would have characteristics similar to a refoundation.

Checks: more deadline and new opportunity for the rejected

The presentation of checks in the collection period will have an additional 30 days, while the emergency is in force, according to the Central Bank.

Through Communication A 6950, the monetary authority seeks to respond to the inconveniences generated after the reopening of the bank clearing on Thursday, March 26.

The measure also has a second presentation for checks rejected for insufficient funds in bank accounts and that banks will not be able to apply commissions to their clients in this type of situation.

The stagnation of the payment chain generated multiple complaints in activities that are required to quarantine and that, without sales revenue, must face the checks they issued.

This is one of the problems. Active companies, meanwhile, also point out that the closure of banks prevents them from taking physical money to their checking accounts, a fact that at the same time complicates compliance with issued securities.

Until now, banknotes can only be deposited through ATMs, but the technical limitations of this system (50 banknotes per operation) make it unfeasible for activities with significant volumes.

Other drawbacks happen because when the banks are closed, the account holders cannot make use of resources put in due time in fixed terms, nor can they access safe deposit boxes to later sell foreign currency.

Some banks (few still and, generally, in the interior of the province) allow to carry out some operations to individual clients, but in the case of legal persons the action is more difficult, since the companies are not usually digitized.

Banks: Credits

The salary line closes at a slow pace.

With the establishments in the banks drastically reduced by the quarantine, the processing of the credits to pay March salaries is going at a slow pace, they say in the business sector.

Yesterday, the Argentine Confederation of Medium-sized Enterprises (Came) again accused banks of speculating on the credits and demanded that they “authorize automatic overdrafts.”

To the own difficulties that SMEs have to qualify, it is added that the technological path is not enough to solve everything. So far, bank branch managers have attempted to resolve the mutual agreement by electronic signature.

Customers commit to attend later, after branches are reopened, to sign the original document.

There may also be an advance of funds through a current account deposit, with 12-month recovery at an interest rate of 24 percent.

But, except for today, which will be paid assets of retirees and pensioners, these days the banks arranged three people per branch.

The set of Argentine financial entities would have 350 billion pesos available to lend at a subsidized rate, of which 30 billion can be supported with the Reciprocal Guarantees Fund.

Print edition

The original text of this article was published on 04/03/2020 in our printed edition.



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