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Six in ten Romanian SMEs will run out of money within two months

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Almost six out of ten small and medium enterprises (SMEs) in Romania (58%) estimate their financial resources will cover their costs for only 1-2 months.

Another 22% estimate that they have enough money for two to four months, according to a new barometer on the state of the economy carried by local financial consultancy firms Sierra Quadrant & Frames.

Most of the respondents stated that they are financially constrained due to weaker sales (61%), financial blockage (14%), scarcer supplier credit (12%), and scarce bank financing (8%).

 

According to the poll, 21% of all polled company owners stated that they resorted to the facility of postponing the payment of taxes to the state.Still, the most frequent solution to the lack of resources (41% of the polled firms) was cutting logistics costs by renegotiating rents, transport costs, and utility bills.Some 27% of the surveyed firms changed their pricing policy, and 9% "optimized" their staff.

 

Asked what they will do when they run out of money, a significant number of investors (43%) mentioned the pre-insolvency procedure (precautionary arrangement) as a solution to keep the company afloat.

 

Some 23% would go into insolvency while the rest mentioned other solutions, such as financing the company from their personal resources or the business's direct bankruptcy.

 

Asked about the challenges they anticipate for 2021, 63% of the respondents said they were concerned about the pandemic's effects, 21% indicated the fiscal challenges (taxes, fees), and 11% mentioned the exchange rate fluctuation.

The financial deadlock, the situation on the political scene, and the labor market problems are also among the challenges mentioned by business owners.

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