GR US

Endeavor Greece: Six out of 10 Businesses Face Liquidity Issues after Lockdown

Αssociated Press

A woman mops the floor of a tavern being prepared for reopening, in Athens, Saturday, May 23, 2020. (AP Photo/Yorgos Karahalis)

ATHENS - Six out of 10 businesses face liquidity issues, with only enough cash reserves to continue operating for less than six months, while three in 10 have zero cash reserves and only 15 pct sufficient liquidity to last more than a year, according to a survey conducted by Endeavor Greece on May 25-27 regarding the impact on SMEs of the temporary restrictions to limit the spread of Covid-19.

The survey questioned 100 entrepreneurs from Greek small- and medium-sized enterprises with high growth rates in 2019, from 15 different sectors of industry.

According to the results, half of the companies had stopped all or part of their commercial activity during the last two months and 57 pct of businesses saw a decrease in their annual revenue, with 17 pct reporting a 60-100 pct drop. However, 24 pct of participants showed growth during the same period.

More than half of the companies have put some or all of their staff on job furlough. So far, only 10 pct of businesses have made redundancies, but this percentage is expected to increase significantly, as 30 pct of entrepreneurs said that they will be forced to cut salaries and lay off staff by around 20 pct by the end of the year.

Regarding the support measures that Greek companies have opted to use to cope with the crisis, 51 pct stated that they have furloughed a significant part of their workforce, while 35 pct have made use of the 40 pct discount on the rent of their business premises. Another 46 pct of respondents have suspended tax payments, while 55 pct have taken steps to expand their funding. Twenty pct of businesses have not used any support measures.

The pandemic also significantly redefined the scenarios on the basis of which companies determine and implement their strategic planning. More specifically, 53 pct of companies are operating under a scenario that sees the recession continuing until the end of 2020, 10 pct until the end of 2021 and 3 pct until the end of 2022. Another 34 pct operate on a scenario that growth will recover as soon as the summer of 2020.

Regarding the time it will take for their industry to recover, 27 pct believe it will be at 2019 levels by the end of 2020, 46 pct estimate that this will happen in 2021, while 17 pct do not expect a return to normalcy before 2022.