Despite the Covid-19 crisis, the financial health of small and medium-sized businesses is quite good, as revealed by the latest Barometer published by the Ordre des experts-comptables. In fact, their profits show an average increase of 2% in 2020.
Losses offset by government aid
Contrary to expectations, SMEs have, on the whole, weathered the crisis well. The Baromètre Image PME (SME Image Barometer ) published by the Ordre des experts-comptables and reported in Les Echos shows that profits for companies with sales of less than €50 million rose by an average of 2% in 2020. The situation is "much less catastrophic than expected", says Lionel Canesi, Chairman of the OEC's Board of Directors.
Although average sales for SMEs remained down over the year, the decline was relatively contained at -6.6%. However, this figure masks a number of disparities. Indeed, some sectors were more affected by the crisis, such as :
- accommodation and catering (-29.2%),
- arts, entertainment and recreation (-35.9%),
- trade shows and conventions (-49%).
This was not the case in the food sector, where sales rose by 8.8%.
These generally reassuring findings are directly linked to the easing of sanitary restrictions and the aid measures put in place by the French government. " Aid has sometimes compensated for more than the loss, especially as it is tax-free, which explains why companies are emerging from the crisis in relatively good health," asserts Laurent Benoudiz, President of the Ordre des experts-comptables d'Ile-de-France.
Fear of rising debt levels
The 9.2% year-on-year increase in SME indebtedness in 2020 calculated in the Baromètre Image PME confirms the Banque de France's statistics. In 2020, the institution recorded an increase of around 10% in outstanding loans to French companies.
While the banks consider that this is an issue that needs to be monitored, particularly in the hotel, restaurant and cultural sectors, they are also reassuring that most loans under the State Guaranteed Loan scheme have not been fully disbursed and can be repaid overnight.
According to a survey of SME and VSE managers carried out at the end of April, the proportion of companies fearing that they will be unable to repay their EMP fell from 8% in February to 5% in the second half of April. Until now, this proportion had been rising steadily. The survey also reveals that more business owners (16%) expect to repay their loan in full in 2021 than in the last barometer (9%), reinforcing the banks' theory.
The OEC, for its part, recommends spreading company debts over 10 years, to avoid excessive increases in indebtedness.