- The most common problems entrepreneurs faced in 2020: declining orders, employee health fears and effective cost management
- Companies paid more attention to cost management and most frequently made cost cuts to raw materials, utilities and marketing
- Together with the presentation of this study, BCR launched the new practical guide SME Invest 2021
Banca Comercială Română (BCR) presented the results of a study dedicated to the IMM Invest programme, which exposes the effects of the pandemic outbreak on businesses and the challenges faced by SMEs, as well as the impact of accessing working capital and investment loans. The study was carried out with the support of entrepreneurs who chose BCR as a partner bank in the IMM Invest programme. The results indicate that the biggest problems they faced over the past year were the big drop in orders, employees’ fear of the pandemic and the need to maintain a safe and healthy working environment, and also the difficulty of sustaining both fixed and variable costs.
The survey data highlights entrepreneurs’ plans in 2021, which include developing their e-commerce strategy and online presence, investing in business expansion and growing their business awareness. The study also shows the business community’s adherence to the fact that adapting business to the pandemic context has been achieved through the development of new products and services, as well as by integrating their businesses online.
“We are concerned about our clients’ financial health and well-being, and that is the reason why we conducted an SME Invest dedicated survey. We wanted to find out not only the business challenges , but also the impact of the emotions experienced by our entrepreneurs last year. 2020 showed us the resilience of the Romanian business environment and we have all the appreciation for the entrepreneurs who worked hard to find solutions, to protect or even grow their businesses. After a year during which the buzzwords were health, digitalisation, efficiency and collaboration, we are more connected, and therefore, stronger and optimistic about the future. We’re glad to have teamed up, and to have helped save as many jobs as possible, and we continue our mission to provide solutions to support our customers. We are launching today the new practical guide SME Invest 2021 and we reconfirm our commitment to provide all entrepreneurs guidance from the BCR team, whether they receive credit or not”, said Sergiu Manea, CEO of Banca Comercială Română.
The data from the BCR study provides a better understanding of the entrepreneurial environment and the measures applied in the pandemic context to support businesses:
- 96% of microenterprise clients and 97% of SME clients said they paid more attention to health education within the company;
- 95% of microenterprise clients paid more attention to cost management: 46% of them streamlined production material costs, 31% cut back on utilities and 28% of them reduced marketing costs;
- 92% of SME clients paid more attention to cost management, with 36% of them streamlining the production material costs, 34% reducing the utility costs and 28% of them making cuts in their marketing budget;
- 64% of the micro clients and 61% of the SME clients have looked at new partnerships with services and materials providers, but also in what regards their interactions with banks and the state to access funds.
In terms of SME Invest programme perceptions, companies that accessed the funds stated they needed them to save their business, with 22% of the microenterprise clients saying they would have needed an extra amount, ranging from €2,000 to €20,000, while 17% of SME clients needed an extra amount, between €51,000 and €150,000 for payments, investment and working capital.
The BCR survey was conducted on a sample of 207 companies, micro and SME clients and data collection was carried out in two stages. The quantitative research took place between December 2020 and January 2021, and it was attended by 59 IMM clients and 148 micro clients. The qualitative research happened during February and March, and targeted 123 companies, 31 SMEs and 92 micro companies, among those who also took part in the quantitative research.
In 2020, under the SME Invest programme, BCR provided financing totalling lei 1.24 billion to 1,810 companies – 1,190 microenterprises and 620 SMEs. The majority of loans were granted for working capital, supporting sectors as trade (23%), construction and building materials (13%), transport (12%), manufacturing (10%), consumer goods (10%), services (8%), HoReCa (4.6%).
The IMM Invest programme allows small and medium-sized businesses affected by the COVID-19 crisis to secure liquidity for their current activity or for investments, by accessing loans/lines of credit guaranteed by the Romanian State through the National Fund for SME Credit Guarantee (FNGCIMM).
The Invest 2021 SME Guide, which can be accessed free of charge on the BCR website www.bcr.ro/imm-invest, provides information on:
- How to access funding through the SME Invest programme;
- Useful financing tips;
- What steps need to be taken to receive funding;
- Programme advantages and which products can be accessed;
- The eligibility criteria and required documents.
What types of funding* can be accessed:
Investment loans up to a maximum of lei 10 million for micro, small and medium enterprises:
- Maximum 80% state guarantee applied to the principal;
- Maturity: 72 months;
- Grace period: maximum 18 months;
- Interest: ROBOR 3M + 1.99%;
- Collateral guarantees, which, together with the state guarantee and the legal mortgage on real estate and/or movable property on the assets acquired from the loan, cover at least 100% of the financing amount.
Working capital loans (line of credit or instalment credit) of up to:
- 500,000 lei for micro-enterprises;
- 1 million lei for small enterprises;
- 5 million lei for medium-sized enterprises:
o Maximum 80% state guarantee applied to the principal (loans up to lei 1 million) and maximum 90% state guarantee applied to the principal (loans up to lei 5 million);
o Maturity: 36 months, with the possibility of extension for a further 36 months (of which the last 12 months repayment in instalments);
o Interest rate: ROBOR 3M + 2.45%.
*A company may benefit from both investment and working capital loans, up to a maximum aggregate amount of lei 10 million, subject to the value limits for each product category.