The first wave of the coronavirus has delivered a severe blow to the small and medium-sized businesses around the world. The market giants have also been suffering massive losses since the virus outbreak. Yet, they have more chances to stay afloat than smaller companies. In fact, small enterprises file for bankruptcy more often as consumer demand remains weak.
In Europe, it has become a real nightmare as more than half of local small and medium-sized businesses have reported possible bankruptcy. Experts fear that such a grim scenario may come true if the situation does not improve for the better. Besides, this is the real statistics but not the forecast of some analysts. If a company wants to declare bankruptcy, it has to do it in advance. Currently, only in France and Italy, one out of five companies is poised to file for bankruptcy within the next 6 months. The disappearance of small companies from the market may lead to serious consequences. The small business accounts for more than two-thirds of the workforce. If these companies are closed, the government’s stimulus spending will soar up. The pandemic has raged through the European market like a black rider of the apocalypse. 70% of local firms announced a decline in revenue.
Most European entrepreneurs consider the economic situation alarming. They worry about the inability to pay off loans and the need to lay off employees. However, economists believe that closing such firms rather than artificially keeping them going is a better solution.
