28% of businesses in the state register losses in 2009

The number of companies with losses in the Spanish state grew during the second year of the recession, according to the Spanish Business and Treasury Association (Asset).

CNA / Laura Pous

July 9, 2010 11:13 PM

Barcelona (CNA).- In 2009, 27.8% of companies in Spain registered losses, a 10 point increase in comparison with the previous year. Similarly, 32% of businesses made profits of less than 5%. The Spanish Business and Treasury Association (Asset) published a report in which they highlight the 'difficulties' for entrepreneurs to get credit and invest. The authors of the report said that the possibility to get credit from the banks, stating that it will never be as it was before the economic downturn. They suggested a change of strategy based on being less generous in paying dividends.
The main reasons behind the bad performances of most companies in the Spanish state is that more than half of businesses cannot afford to pay all their debts or have to pay them with more time. This has pushed lots of companies to ask for credit to the banks, but the financial sector is not especially generous, according to the study. The report says that 54.6% of companies that applied for credit found 'restrictions' and, when they received the money, more than 70% contracted worse conditions than before the crisis. The money, the report says, is becoming more expensive and difficult to obtain.

It will be unlikely to see a recovery in the company profits, say experts. According to them, the challenges to obtain credit will make it harder for entrepreneurs to improve their economic performance.