Bankruptcy wave is inevitable, but intervening earlier can be the solution
The corona crisis will lead to a wave of bankruptcies. Intervening earlier can prevent many such dramas, thinks Diederik van den Biggelaar of interim management agency Mandaat.
It is clear that many companies will not make it. Banks are already putting billions of euros in the sling pot, because they see that companies cannot repay their loans. This means that they are already ready for the wave of problem cases in the Special Management (BB) departments, where all companies in trouble move to. “It always takes a few months for companies to get there. From September they will move en masse to the BB department. "
Van den Biggelaar knows what he is talking about. For more than eleven years, he has co-headed Mandaat, a company that provides interim managers to companies in difficulty. "During the previous crisis, 23 percent of small and medium-sized enterprises (SMEs) were in the BB department." Of the companies that end up there, some do not reach the finish line. That is why it is also referred to as the "creping department" among entrepreneurs. According to entrepreneurs, the bank is not at all concerned with saving a company, but only with limiting the damage to the bank.
Van den Biggelaar nuances that image somewhat. “In general it is true that banks look at self-interest. Banks are not daredevils, they demand certainties. But BB consists of two departments, restructuring and settlement. Upon settlement, the companies go bankrupt and the bank's policy is aimed at getting as much money out of the company as possible. "But some of the companies are viable and they end up in the restructuring department."
At those companies, Van den Biggelaar and his men, and a few women, look around the corner. "We are asked to see if and how a company can be saved." Van den Biggelaar usually does not receive a warm welcome. ,, The bank proposes to the company in difficulty to bring in an interim manager. We enter at the request of the bank, so we are seen as the man of the bank. But the company has to pay us. "
The first assignment for the interim worker is to get the relationship with the management right. "That means listening and letting the director decide on how outrageous the company is being treated by the bank. Directors often own the company, they have grown into it. And it went well for years, so they can hardly accept that it is less now. The blame is often placed outside the company or themselves. "
It is not easy for the entrepreneur to face reality. “The company is almost always worse off than they say. We have a temporary backlash, they say. And then it turns out that they can no longer pay the salaries that month. As an interim manager, it is important to convince the entrepreneur that you have added value to save the company. "
That does not always work. “For example, we were involved in the bankruptcy of Free Record Shop. It quickly became clear that the company could not be saved, nothing was sold in stores anymore. It soon turned out that Hans van Breukhoven, whom I think is an incredibly good entrepreneur, was not open to advice. Then we can't do anything. "
Look at the travel industry, there will be many bankruptcies
Bringing salvation means intervening quickly and rigorously. For example, implementing cost savings by sending staff home. But money can also be made quickly with simple interventions. “We usually put an employee on having debtors pay faster. That immediately generates money. We tell major creditors to wait a little longer for their money. If you explain that, they usually agree. "" Small creditors are paid immediately, which makes the administration a lot more transparent.
During the previous crisis, Mandaat managed to save dozens of companies from destruction. This time it will be more difficult, expects Van den Biggelaar. “In the previous crisis, you saw that companies across the board were affected by the crisis. They sometimes went down 10 or 20 percent. Now the crisis is affecting fewer companies, but the companies that are hit are hit much harder. Look at the travel industry, there will be many bankruptcies. "
Van den Biggelaar's experience is that many bankruptcies could have been prevented. “This crisis is much more unpredictable than other crises I've seen. I understand that companies could not prepare well for this. They therefore stick to their staff and revenue model. Then they feel mugged when they are later at BB. I therefore call on companies to switch to their bank earlier. You can prevent a lot of misery with that. "
The entrepreneur must take action, emphasizes Van den Biggelaar. ,, The bank lets the debts rise to the level of the securities it has. When that point is reached, she pulls the plug. It would be very helpful if the bank says to its customer: "we see that things are going badly, you wouldn't even think about this." But the bank does not do that. The request for help must really come from the customer. "
Banks have become more risk-averse, in Van den Biggelaar's experience. ,, You used to have a problem if you could no longer pay the interest on a loan. Now they intervene if your interest coverage drops below a certain level. "He would prefer companies to do some sort of financial APK every so often. "let us watch. If we are busy for a week, we can already do a lot. Usually it is not so difficult to put the finger on the sore spot. Often the problem is an over-optimistic and problem-denying board. Or companies do not have a good understanding of how they make money and how they lose money. "
Adjustments in a timely manner prevent a company from getting into trouble. And the company is more resistant to a crisis. “That prevents you from sitting in front of such a boy from the bank in the BB department. They are smart enough, but have not had an empathy course. "