Bulgaria: Two-Thirds of Small Businesses Cannot Service Their Loans

Business | January 6, 2021, Wednesday // 15:36
Bulgaria: Bulgaria: Two-Thirds of Small Businesses Cannot Service Their Loans pixabay

More than 20% of small and medium-sized enterprises in the country have difficulty reviving their business impacted by the Covid crisis. More than 75 percent have unserviced bank loans and only about 15 percent of businesses have been able to use the opportunities of the crisis for the development of their business, shows a survey of the National Association of Small and Medium-sized Businesses, BNR reported.

Companies engaged in online services, retail, courier deliveries and digitalization are going through the crisis with flying colors, but those in the traditional sectors are suffering the severe consequences of the crisis and do not even have a strategy to reduce the damage, says chair of the association Eleonora Negulova.

"They have difficulty restarting due to a shortage of liquidity. They have infrastructure to produce goods or services, they have people, but they don't have working capital to restart. And in fact, they will face a decision on whether to declare a technical bankruptcy," she said.

Bank loans are also proving to be a problem for a large number of small and medium-sized enterprises.

"Small businesses were actually looking for a way to pay arrears to the Fisc in the first place – to pay taxes, social security, etc. And in fact, this decapitalization reflects the fact that the loans cannot be serviced, and there is already an avalanche-like process, since the restructuring of the loans also requires time and resources", commented Negulova.

 

 

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