? Three quarters of all companies bemoan lack of planning reliability in the wake of the euro crisis
? The public sector obtains money too easily - in the opinion of the Mittelstand (SMEs) one of the main reasons for over-indebtedness problem
? Mittelstand avoids debt, but misses out on growth opportunities as a consequence
? Basel III does not make banks more stable in the opinion of entrepreneurs but makes loans more expensive for Mittelstand
The euro crisis has hit the Mittelstand (SMEs) real economy
with worries about the development of sales markets and
planning reliability. 72 per cent of the surveyed companies
and as many as 75 per cent of the exporting companies state
that the euro crisis not only lowers medium- and long-term
planning reliability, but also has a negative impact on
their own business activities. 63 per cent fear that the
economy is weakening. These are the key results of the
twelfth study by "Unternehmer-Perspektiven"
("Entrepreneur Outlook"), a SME initiative of
Commerzbank, with the title "Good Debt - Bad Debt:
Entrepreneurship in Difficult Times". In January 2012
TNS-Infratest surveyed the managing directors and owners of
4,000 medium-sized companies on the impact of the euro
crisis and their attitude to debt. "German
medium-sized companies are observing the consequences of
the euro crisis with concern yet without any alarmism. The
companies know that they have also profited tremendously
from the euro in recent years," says Markus Beumer, a
member of the Board of Managing Directors of Commerzbank AG
and responsible for Mittelstand business. "That the
euro crisis has had an impact in terms of economic
psychology may be seen from the following example: In
response to the question as to which consequences are
feared when it comes to financing, nearly one third of the
medium-sized entrepreneurs states worries about interest
rates and the repayment of loans. And this although
interest rates are currently lower than ever before,"
adds Beumer.
Reasons for excessive indebtedness are management errors
and access to loans being too easy
As reasons for the financial emergency faced by the public
sector and industry the surveyed companies stated
management errors, excessive risk and a lack of financial
know-how. On one particular point the companies are
especially critical: 78 per cent of the respondents believe
that one of the main causes of excessive indebtedness on
the part of local authorities, federal states and sovereign
nations is the fact that credit is too easy to obtain. Only
47 per cent of the respondents see this danger for the
Mittelstand economy in contrast.
Lack of planning reliability becomes obstacle to
investment
Debt and outside financing are regarded critically by the
majority of entrepreneurs. 78 per cent agree with the
statement "Debts increases risk for the company",
whereas only 65 per cent share the view that investments
are only possible through debt. A mere 24 per cent of the
companies describe debt as the "driving force behind
success". Even with investment financiers the
proportion of those who initially consider the
opportunities associated with borrowed capital is only
marginally higher (31 per cent). Against this background
the majority of respondents (54 per cent) replied to the
question of constraints on investment with uncertain
economic framework conditions. A lack of personnel and
difficulties securing loans are stated much less frequently
(38 and 17 per cent, respectively). Markus Beumer on this:
"A credit institute such as ours has, together with
its customers, to ask the question of how one can define a
responsible attitude to debt so that the necessary
investment in growth is not neglected as a result of risk
aversion being too great." In line with the motto
"Cash is King" 76 per cent of the companies use
profits and reserves for financing, 75 per cent the cash
flow. Medium- and long-term loans with a term of at least
two years are utilised by 59 per cent of the respondents,
60 per cent use short-term loans to meet their funding
needs. Alternative forms of financing such as factoring and
risk capital are used by a comparatively small number of
companies (less than 10 per cent).
Basel III only helps banks and the Mittelstand to a limited
extent
In the view of the Mittelstand, banks are in a much more
stable position than in the 2008/2009 financial crisis.
Here in Germany there is much less worry about rising
financing costs, greater difficulty accessing loans, the
consequences of the implementation of Basel III, and the
instability of banking partners compared to the
developments on the markets and in the world of politics.
"The differentiated view of the Mittelstand shows it
is apparent that the reason for the current crisis is not
so much regarded as errors in the financial industry but
rather the high level of sovereign debt in Europe,"
says Markus Beumer.
The initiative "Entrepreneur Outlook" and the
studies
"Entrepreneur Outlook" is an initiative of
Commerzbank. Its objective is that of establishing a forum
and platform for issues affecting medium-sized companies in
Germany. The basis is formed by representative surveys of
4,000 medium-sized companies in Germany. The study results
are discussed with representatives of industry,
federations, politics, and academia - also on public podia
- so as to create mutual understanding and develop
sustainable approaches to the challenges facing the
Mittelstand.
The complete study, as well as further information on the
initiative, is to be found under www.unternehmerperspektiven.de.
Please note the new website of the management of
Mittelstandsbank at http://www.msb-management.commerzbank.de.
Press contact:
Martin Halusa: +49(0)170 8528638
Bernd Reh: +49(0)170 9143734
*****
About Commerzbank
Commerzbank is a leading bank for private and corporate
customers in Germany. With the segments Private Customers,
Mittelstandsbank, Corporates & Markets, Central & Eastern
Europe as well as Asset Based Finance, the Bank offers its
customers an attractive product portfolio, and is a strong
partner for the export-oriented SME sector in Germany and
worldwide. With a future total of some 1,200 branches,
Commerzbank has one of the densest networks of branches
among German private banks. It has around 60 sites in 52
countries and serves almost 15 million private clients as
well as 1 million business and corporate clients worldwide.
In 2011, it posted gross revenues of almost ?10 billion
with 58,160 employees.
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