Loss of sales also weighs on many medium-sized companies in the second year of the corona pandemic. However, some prove to be resilient.
The economic consequences of the corona pandemic hit the around 3.8 million medium-sized companies in Germany to varying degrees. According to a KfW study, small companies get through the crisis worse than medium-sized companies.
Companies that are active abroad or that had a poor credit rating before the crisis were also more affected, according to the investigation by the state development bank published on Thursday.
According to this, in May of this year, a total of 39 percent of medium-sized companies with a turnover of a maximum of 500 million euros a year lost revenue. At the beginning of the crisis in April 2020, it was 66 percent. About a quarter (24 percent) of the companies reported a lower equity ratio in the wake of the pandemic. The equity ratio is an important parameter when determining the creditworthiness of companies. A deterioration in the quota can reduce the financing options.
According to the information, small companies with fewer than 5 employees are most likely to suffer from the consequences of the crisis. Accordingly, 41 percent of them are still struggling with lost sales, 24 percent reported a lower equity ratio. “Due to their smaller company size, they basically have fewer opportunities to build up sufficiently large reserves to overcome crises,” explained KfW chief economist Fritzi Köhler-Geib.
Small and medium-sized enterprises active abroad have so far come through the Corona crisis worse than domestic companies, both in terms of sales losses (46 percent versus 37 percent) and the development of the equity ratio (29 percent versus 22 percent).
Greater resilience was noted among companies that had carried out innovation and digitization projects before the outbreak of the pandemic. They recorded lower equity ratios less than the average. “The fact that digital and innovative medium-sized companies have gotten better through the pandemic gives economic policy a tailwind to now set the right course and to stimulate future investments in digitization and innovation as well as in climate protection,” said Köhler-Geib.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
