ING: more than double bankruptcies in 2021 | Financial

The Netherlands is expected to experience an economic contraction of 6 percent this year. As a result, according to the researchers, the number of bankruptcies will increase by 40 percent to about 4,500 in 2020. A year later, the ING Economics Department expects 1.5 percent to 2.5 percent of all companies to go bankrupt, which amounts to 6,500 to 10,000 companies that payment problems perish.

Support

The bankruptcy wave is somewhat damped. For example, the government has already pulled out a lot to provide financial support to companies affected by the pandemic, for example by taking on a large part of the wage costs.

According to economist Katinka Jongkind of the ING Economic Bureau, the flexibility of companies in certain sectors also helps to limit the number of bankruptcies. For example, companies in wholesale or retail trade can reduce purchasing costs relatively quickly.

Retailers and catering

Retailers, together with catering entrepreneurs, are among the most severely affected entrepreneurs due to the corona crisis. Cafés and restaurants had to be closed for weeks to stop the spread of the coronavirus, and many shops followed suit. Moreover, the lockdown measures resulted in fewer customers visiting non-food stores.

Nevertheless, the risk of bankruptcies in these sectors is low, ING says. These companies have relatively few capital goods, such as expensive machines. It would therefore not always be beneficial for creditors to aim for bankruptcy. Instead of going bankrupt, entrepreneurs in these sectors can more easily end their own businesses.

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