Over 70% of Romanian companies do not have a risk plan for situations such as the coronavirus pandemic. The barometer recently conducted by Factory 4.0 and Frames shows how fragile the preparedness of domestic investors is for facing an enemy that severely tests all the world’s economies and forces them to seek alternative financing solutions.
Many Romanian companies do not have sufficient stock to cover a potential disruption in their supply chain from suppliers, and this can have very serious consequences for ongoing operations. The lack of managerial crisis-response plans, the poor digitalization of production and business operational processes that would allow remote control of processes or teleworking, as well as the absence of financial reserves for such situations, are likely to lead to payment delays and financial blockages,” state the authors of the barometer conducted on a sample of 300 firms from various sectors, including commerce, financial services, agriculture, energy, apparel, IT, etc.
Coronavirus și creditarea firmelor: ce soluții există?
Corporate lending with traditional instruments is becoming an increasingly difficult mission as global financial uncertainty rises. In situations like the one created by the COVID-19 coronavirus, the preventive measures that companies must ensure are aimed, first and foremost, at establishing a financial buffer that allows them to face the challenges in the payment chain. Companies must closely monitor their expenses, reduce the average receivables collection period, and thereby succeed in shortening suppliers’ payment terms.
Alternative financing solutions Such as factoring or reverse factoring put at companies’ disposal mechanisms that regulate the relationship between suppliers and beneficiaries, reducing the risk of invoice non-payment and shortening collection terms, which can contribute to easing financial bottlenecks. With a balanced cash flow, firms can adapt more quickly to economic fluctuations and have greater room for maneuver. In addition, maintaining collaborative relationships with suppliers allows them to devise more efficient strategies for various risk situations when corporate lending is under threat.
