Company: More company bankruptcies expected: “Everything depends on the pandemic”

More company bankruptcies, but no bankruptcy wave: Experts assume that after a record low in Corona year 2021, there will be more company failures in the coming year for the first time in a long time.

“We are not assuming a wave of insolvencies, but expect an increase in the coming year, especially in retail and catering. In the commercial sector, the numbers are likely to stagnate, ”said the head of Creditreform economic research, Patrik-Ludwig Hantzsch. It would therefore be the first increase in corporate insolvencies since 2009.

According to data published by the credit agency on Wednesday, the number of corporate bankruptcies in the current year has fallen to the lowest level since the introduction of the bankruptcy code in 1999 thanks to government corona bailouts. Creditreform is assuming 14,300 cases, which would be 10.8 percent less than a year ago and a half as many company bankruptcies as in 2012.

Creditreform did not provide an exact forecast for the coming year. “Everything depends on how the pandemic develops and whether there will be interference in economic life again,” said Hantzsch. It could be difficult, among other things, for companies that had taken out corona aid loans from the state development bank KfW. «While equity is shrinking on the one hand, the loans taken out are a long-term burden on companies. If there is a bigger crisis now, many will definitely run out of steam. “

Insurer: Still at a low level

The credit insurer Euler Hermes also expects more company failures in Germany in the coming year. In 2022, the number of bankruptcies should rise to around 16,300 cases after an estimated 15,000 bankruptcies this year, said Euler Hermes expert Maxime Lemerle at the beginning of October. In his estimation, however, there is no threat of a wave of bankruptcies: “The number of cases continues to be very low.”

In the current year, despite massive restrictions to contain the pandemic, which hit gastronomy, trade and tourism in particular, a wave of insolvencies was prevented by state support. “The other side of the coin, however, is the growing number of potential zombie companies, the creation of which is being promoted by the continued subsidy policy,” warned Creditreform expert Hantzsch.

However, the Deutsche Bundesbank recently saw no signs that companies that are actually not viable are being artificially kept alive with state aid. “At the moment we see no evidence that we are getting a zombification,” said Bundesbank Vice President Claudia Buch. But you have to watch the situation in the corporate sector very closely. “We certainly do not want to get into a situation where we delay bankruptcies.”

Small businesses severely affected

The state corona economic aid and the regulations on short-time work were recently extended to the end of March 2022. According to private banks, this will prevent a wave of bankruptcies in Germany. The mood in companies has recently deteriorated significantly, said the chief executive of the Association of German Banks (BdB) Christian Ossig recently. “But we still do not expect a large wave of bankruptcies.” However, according to the BdB, the coming months could be precarious for some companies. “Small companies in particular are showing their first equity gaps”, wrote the BdB.

There are already the first signs of this. According to data from Creditreform, the number of bankruptcies of small businesses with an annual turnover of less than 250,000 euros has risen against the trend to 7,340 cases this year. In the previous year there were still 7290 insolvencies. “As the Corona crisis continued, these companies had fewer and fewer reserves,” explained Creditreform.

In order to avert a wave of bankruptcies in the 2020 Corona crisis, the state temporarily suspended the obligation to file for bankruptcy in the event of over-indebtedness or insolvency. Since May 1st of the current year, the obligation to file for insolvency has been fully applicable again. There are exceptions for businesses that have suffered damage from heavy rain or flooding in the summer.