Money is not enough to ensure success after Corona. Facilitated loans and deferred payments only provide liquidity. Success requires resilience, a business model with a functioning supply chain, efficient operations and profitable sales to customers a swell as a solid capital structure. Companies and business units well-positioned in the value chain could gain market share as a result of the dislocation, accelerated technological development and online shift of business models. Others will have to reposition themselves. Simplifications in insolvency law can help also to protect the healthy.
Serious mistakes made while businesses are still profitable may cause restructuring needs.
Banks reduce SMEs lending services. What is happening?
- Lending to non-financial corporations in Europe is declining since years while much funds are idle and central banks’ interests low. Banks reduce SMEs lending services especially in the stressed Euro periphery with consequences.