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SMEs predict greater delinquency due to the impact of the rise in rates

Date: March 4, 2024 Time: 01:33:13

Cepyme, the employer of small and medium-sized companies, has warned today of a possible increase in delinquencies and the cost associated with the latter as a result of higher inflation and the restriction in access to credit, made more expensive by the rise in rates. According to data from its Delinquency Observatory, the average payment period for the first quarter stood at its lowest records since 2015 (82.1 days on average), in what is considered “prudent treasury management”, but which also implies an abnormal situation of commercial traffic: “companies are having to take measures to protect their treasury”, has assured Diego Barceló, head of studies for the employers’ association.

“Micro-enterprises are the ones that are carrying out the worst part. If the data is compared with that of the first quarter of 2019, they are carrying out a longer collection period, with an average payment period 15 days longer than four years ago , when in medium-sized companies it has been reduced by five days”, according to data from the Observatory. The time in which companies pay their invoices has grown to 82.1 days in recent months, from the 80.3 days registered in the fourth quarter of 2022, although this situation would be due to “the seasonal nature of the start of the year.” In recent months, this PMP has shown a clear downward trend with the only upturn in this first quarter of the year.

All sectors —agrifood, industry, construction and services— are paying their bills more quickly than in previous years, with the salvation of the energy subsector. Retail and wholesale trades and vehicle sales are the sectors that have recorded average record payment periods since 2007, something that Cepyme justifies in the fact that its financial difficulties are worsening.

Precisely, the higher cost of financing has also caused the cost of commercial debt to double compared to one year to 2,649 million euros, the highest since 2011. “When a company invoices and does not collect, it has to finance that payment and assume a cost And these financing conditions have become much more expensive due to inflation, because rates are rising and because defaults have risen,” Barceló explained. The aggregate commercial debt of SMEs is around

The president of Cepyme, Gerardo Cuerva, urged the Government of Spain to approve the new European delinquency directive, taking advantage of the rotating presidency of the European Union that will begin in June. “Late payment is one of the factors that hinder the competitiveness of SMEs and their growth, which is why they worked to make it converge within reasonable limits.”

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Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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