The slowdown and the end of the ICO moratorium are accelerating the bankruptcy of small and medium-sized businesses

The convergence of two main factors is beginning to support a worrying trend of increasing bankruptcy proceedings in Spain, especially among small and medium-sized companies, which are more sensitive to economic imbalances and more vulnerable given their impact on their balance sheets. end hand Stop credit ICO Granted during the tougher months of the pandemic, the dramatically accelerated bankruptcy proceedings in the third and fourth quarters of last year.

According to the latest estimates published by the employers’ association Cepyme, in the fourth quarter of 2022, the bankruptcy procedures It grew by 23.6% compared to the same period of the previous year. Although it moderated the exorbitant increase in operations aimed at avoiding corporate bankruptcy in serious difficulties, it increased by 87.6% in the third quarter of the year. Of the total 5,544 bankruptcies recorded in the fourth quarter of 2022, 4,407 were of individuals and 1,137 were of companies. However, it doesn’t look like the horizon will be any better for this year.

The new increase in labor costs approved by the government with the rise in SMI and in the maximum contribution rules, and the increase in production costs That historical levels of inflation led to an increase of 24% in the past 12 months does not leave a particularly rosy picture. “We’re also waiting to see what processes go directly to notaries that involve direct closing,” we note with some caution about the numbers released by employer sources consulted by ABC.

On the other hand, the cooling of the economy and the moderation of activity and consumption do not bode well for the general improvement of the performance of the productive fabric either. chief cepyme, Gerardo CuervaDuring his talk yesterday on “How bankruptcy reform will affect Spanish SMEs”, he indicated that the supply of bankruptcies will remain “high”, in the current context characterized by “disproportionate” increase in costs and high inflation rates.

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New Bankruptcy Code Shortcuts

At this point, the fix Uniformity law It includes amendments to the mechanisms of corporate restructuring, debt handling, abbreviated operations for small enterprises, and the tools necessary to initiate asset disposal operations. Cuerva hopes that the intended goal will finally be achieved in the new formulation, though he calls for caution in “not saying whether it is good or bad until it has shown its effect”.

Loss of work force
bankruptcy procedures

In the fourth quarter of 2022, there was a rise in bankruptcies of 23.6%. Among them all, there are 4407 individuals.

Commercial law judge. Andres Sanchez-MagroIn this regard, he indicated during the day that the new law calls for changing the culture in the company when facing bankruptcy. “There is a need for early insolvency prevention tools” in order to avoid the closing process, “in which case liquidation is swift,” the judge explained about the elements of improvement introduced by the new regulations.

The judge also drew attention to how a file was made legal framework The previous version caused about 99% of bankruptcies to end in liquidation, “which is the most Cepyme hopes the new regulatory scheme can stop.” It must be remembered that Spanish SMEs have suffered from a changing regulatory environment since March 2020, and although they received 130.000 million euros in ICO-guaranteed loans, this relief was temporary and now they must bear returns only when labor costs increase. and inflation. heavily.

They point out from Cepyme that the numbers of the last months of the past year, the importance of preparing the business owner and anticipating a possible bankruptcy situation, which is exactly what the new reform of bankruptcy law seeks to present, as a tool to work through a restructuring planTo take measures to avoid bankruptcy.

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