Concern about the number of companies on the verge of bankruptcy

With the quarantine extended until May 10, the risk of companies reaching the worst of the crisis is increasing, and many firms that operate in large cities and in the suburbs already warn of the acceleration of contests and bankruptcies starting next month.

“Massive defaults are expected in May, which can lead to bankruptcies,” tax specialist Ivan Sasovsky said at a conference with clients about the impact of Covid-19 on economic activity.

According to Juan Acosta Güemes, of SFI, which advises its clients on property coverage, there will be “prolonged or definitive closings of many businesses, contracts of all kinds will be massively breached and there will be executions, preventive contests, bankruptcies”, explains Perfil.

Orlando J. Ferreres consultancy estimates that the general level of activity registered a 9.5% annual decrease in March and a 5.4% decrease in the first quarter of the year. In April, meanwhile, the decline is expected to be even more pronounced.

According to Daniel Rosato, from Industriales Pyme de Argentina (IPA), he assured that “there are already many companies closed. They are not bankrupt but they are not operating. The system is contained today but there are many companies with financing problems,” Profile says.

Despite the government launching soft loans, SMEs warn that they still have difficulty accessing.

“So far, the announced package of measures involves a stimulus that exceeds 3.5% of GDP,” said consultancy LCG. It includes state coverage of 50% of the payroll of the affected companies, social assistance to workers, retirees and beneficiaries of social plans, zero rate loans for independent workers and aid to the provinces. “

Help with card

In this framework, the Central Bank made official the zero-rate loans for monotributistas on Friday. Communication A 6993 establishes that banks must grant loans to beneficiaries according to the lists of the Federal Administration of Public Revenue (AFIP).

All entities must allow them to be requested by homebanking and issue the necessary credit cards for accreditation in the event that customers do not have one. There can be no “charge of any cost for the issuance of that card or for its maintenance.

Despite official measures, the Confederation of Medium-Sized Enterprises (CAME) requested that the Government extend the measure of the complementary salary and, through the Anses, pay 100% of the net salary of workers of SMEs that employ up to 40 people, regardless of the category to which they are dedicated. ATP, they say, is “insufficient”. SMEs with this number of employees “represent 30.3% of total employment generation and a net salary mass of 70,701 million pesos,” said Gerardo Díaz Beltrán, president of CAME.

The Business Convergence Forum also requested that economic, financial, credit and tax measures continue to be taken to ensure the payment of wages in all productive and service units of the private sector and preserve the continuity of companies. Industries in locations far from urban centers will begin to resume tasks. After the creation of a security protocol and in the event of possible cases of Covid-19 by the UIA,
they adapted the processes.

“During the last 15 days, works were carried out in La Plata to adapt them to sanitary and distancing protocols, installing fumigation booths, lavandin pools, hygiene elements and signs to guarantee the safety of the personnel,” they explained.

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