One in four businesses won’t make it out of lockdown without help
Share article:
Share article:

One in four businesses won’t make it out of lockdown without help

A deserted Rue Neuve in Brussels under lockdown. © Belga

One in four businesses in Belgium will come out of lockdown only to go bankrupt without additional government help, according to a survey carried out by the consultancy Graydon.

A large number of companies are structurally sound enough to come through relatively unscathed, Graydon said, either because they were strong going in, or because their business was not badly affected, or both.

Others will be safe thanks to the government help made available since the first lockdown measures were introduced in mid-March.

And a large share of companies will barely scrape through, doing just enough to survive, and hoping for a rapid return to normal so as to quickly make up for the damage done.

Nevertheless, about one in four will re-open only to close shortly after.

The regions differ slightly in their prospects. For Belgium as a whole, Graydon calculates the number of companies in danger at 25% grave danger and 38% raring to go, with the neutral group in the middle.

Flanders has 24% in danger, and Wallonia on 25%. Brussels, however, has 35% of its companies in immediate danger, with only 28% in the safe group.

Only a small percentage of companies predicted to fail were already in deep trouble before the crisis; the majority were pushed over the edge by the circumstances of the lockdown and its knock-on effects. That was particularly the case for sole traders and associations in the non-profit sector.

The analysis by Graydon suggests that financial support is required to stop a quarter of companies from going under. That can come from three sources: direct government support; increased access to bridging credit from banks and other lenders; and capital injections from shareholders where the company structure allows it.

Graydon’s simulation took account of the situation until 3 May, when some of the lockdown measures will be adapted or abandoned. But the government’s exit strategy comes in various phases yet to be clearly defined. How the following phases will affect the business climate remains to be seen.

Alan Hope
The Brussels Times

Latest news

Belgium in Brief: A Consultative Committee Sequel
Sequels often have a lot to live up to and when it comes to movie franchises, it gets difficult to keep up the hype once you get towards the final ...
25 years ago today: 300,000 people marched in white against child abuse
On this day 25 years ago, over 300,000 people marched in Brussels to demand a more effective justice system and to support the families of Julie, ...
Windy weather forecast should lower gas prices
After weeks of relatively calm conditions, a return to windy weather should lower Europe's soaring energy prices. Wind turbines in the UK and Germany ...
EC calls on candidate countries to focus on fundamental reforms before they can join the EU
The Commission adopted yesterday its 2021 Enlargement Package, providing a detailed assessment of the state of play and the progress made by the ...
Cigarette-eating robot patrols Ghent streets to fight littering
A litter fighting (and eating) robot will be patrolling the streets of Ghent in the coming weeks in an effort to raise awareness of the growing ...
Display of child’s room in Brussels raises awareness of foster families
An exhibit that features a fictitious child’s bedroom has been on display since Tuesday at the Place d'Armes in Namur, with the support of the ...
Brussels Airport becomes shareholder in SkeyDrone
The Brussels Airport company has signed an agreement to become a 50 percent shareholder in SkeyDrone, a subsidiary of skeyes, the Belgian Air ...
Two former Belgian top executives plead guilty to bid manipulation in the US
Two former Belgian top executives of the security company G4S have pleaded guilty in the US to bid rigging, according to reporting from De Tijd. ...
8 arrested in Belgium and Luxembourg for fraud and social dumping
On Tuesday, around 80 police investigators and 26 social investigators made a series of simultaneous arrests in Belgium, Italy and Luxembourg as part ...
More than 5,500 people took part in the citizens’ consultation on road safety
Over 5,500 people took part in a citizens’ consultation on road safety for Belgium between July and October, according to Belga News Agency. The ...
Coronavirus: Nearly 1,000 patients hospitalised, 80 admissions a day on average
Between October 10 and 16, an average of 3,151 people were infected with Covid-19 every day, according to figures from the Sciensano Public Health ...
‘More concern and false impressions’: colds are not worse than before, experts say
While it seems like cold viruses are hitting especially hard this autumn, with more severe and longer-lasting symptoms, doctors are saying that this ...