10% of companies warn that they will not be able to survive due to the rise in late payments and defaults
Delinquency is becoming another added problem which adds to the spiral of bad news that Spanish companies have to receive every day since the start of the coronavirus crisis. Two out of three Spanish companies suffer from negative impact of late payment in your income statement. And, in fact, 10% affirm that they run the risk of closing due to the impact of unpaid invoices on their accounts, details a report by Iberinform and Crédito y Caución.
The report further highlights that 44% of Spanish companies face significant loss of income due to late payment and 35% register an increase in their financial costs. Further, 15% are forced to limit their new investments and 20% to stop its commercial expansion.
These are the figures that have been put on the table by the study on Credit Risk Management in Spain carried out by Crédito y Caución and Iberinform, in which the managers of more 700 companies of all sizes and sectors.
According to the report, “the lack of control over corporate delinquencies is a risk for business activity” and “the failure to meet the agreed payments generates significant liquidity tensions in a situation such as the current one and is especially destabilizing in company operations smaller size ».
The study affirms that “if the non-payment of a sale on commercial credit is reached, the loss equals the costs of producing the product. And it shows the following calculation: «The impact of a commercial default is accentuated the lower the profit margin, since multiplies the number of sales with solvent customers necessary to compensate for the loss. If a company with a 10% commercial margin suffers a non-payment of 10,000 euros, it must generate a new business for 100,000 euros to compensate for the impact of the 9,000 in production costs, “he concludes.