SMEs: cash flow at an all-time high, but downgraded demand prospects

SMEs and very small businesses (TPE) have a better cash flow situation than ever, but face degraded demand prospects which are slowing their growth, according to a barometer published on Wednesday by Bpifrance and the Rexecode institute.

Read also: The net indebtedness of companies increased very little in 2020

Despite the Covid-19 crisis, business leaders' appreciation of their current cash flow has been at its highest since the launch of this quarterly survey in 2017, which is based for this latest edition on more than 500 responses to a questionnaire between February 2 and 12.

Compared to the fourth quarter of 2020, the opinion of managers as to the future evolution of their cash flow has also recovered markedly, 55% anticipating stabilization, 36% deterioration and 9% improvement.

On the other side of the picture, half of the owners of SMEs cite the poor outlook for demand as a brake on their growth, a proportion that is declining, however, since they were 60% in this case during the last quarter of 2020. Recruitment difficulties, the main one slowdown in the development of activity before the health crisis, are relegated to second place.

Fears around the EMP

Also, faced with still fragile recovery prospects, 60% of SMEs and VSEs having obtained a loan guaranteed by the State (PGE) now plan to amortize it over several years, against only 45% in the previous survey carried out on October 26 to December 1.

In addition, 8% fear that they will not be able to reimburse their EMP, a proportion which remains low, but continues to increase: only 6% of companies were in this case during the previous survey and 4% at the beginning of September.

The constraint that indebtedness places on any business development projects is considered

by only 14% of managers, and

” for more than half of them.

say the public bank and Rexecode in a statement.

Finally, 60% of entrepreneurs do not plan to change their method of financing following the crisis, while 20% think they use banks more.

But only 6% of SME / VSE bosses are considering a contribution from associates or relatives and 6% to open their capital, while the government must soon announce a mechanism to allow companies to strengthen their equity.