Belgian small and medium-sized enterprises (SMEs) are in good financial shape, but could invest more, according to the ninth annual report on SMEs by the Graydon firm in collaboration with the UCM employers’ association and Unizo, which represents self-employed entrepreneurs. Generally, the financial health indicators of the SMEs are in the green. Nationally, barely 11.8% presented a high risk of bankruptcy in 2016. “An average 90% of SMEs are thus in relatively good to very good financial health,” it was noted.
Some 10.6% of SMEs presented a high risk of bankruptcy in Flanders and 11.8% in Wallonia, which are the lowest rates in the past 10 years. On the other hand, the proportion is much higher in Brussels – 22%. At the other end of the scale, SMEs with growth potential represented 77.4% of the total in Wallonia, 75.3% in Flanders and 62.4% in Brussels.
Since 2013, the level of indebtedness of SMEs has been constantly decreasing while their liquidity has been on the increase. “This independence gives them more growth and investment prospects,” says Eric Van den Broele, a researcher at the Graydon commercial information office. That said, “too much liquidity almost leads to an unhealthy situation because that money does not produce any yield. That money can be withdrawn from the SMEs and invested,” he added.
The UCM calls the data “promising” but feels “much is left to be done to accelerate the growth of SMEs”. In this regard, it points to a need for social peace “to preserve productivity”, better use of public tools, promotion of community-based loans or preventive intervention for companies in difficulty.
The report analyses individual companies and SMEs with up to 50 workers. In 2016, there were 1,098,727 active SMEs in Belgium, almost half of them less than 10 years old.
The Brussels Times
