According to the latest available data from the Central Statistical Office from the end of January 2024, 4.7 million employees are employed in microenterprises (up to 9 employees), which is every fourth person in Poland. This is more than the staff in the largest corporations, employing over 1,000 people. If we add to this the 2.6 million people working in small companies (10-49 employees), which in the vast majority also operate as sole proprietorships, it turns out that the smallest enterprises employ almost half (48.6%) of the 15.06 million people working in the national economy. Men dominate in microenterprises, and the largest group employed there are people aged 35-44. The largest number of such entities operate in the east of the country – in Podlasie, Lublin and Podkarpacie.
Many of them employ 2-3 employees. The challenge is the constant increase in the minimum wage. In addition, there are high ZUS and energy costs. As a result, their budget is not closing. CEIDG data show that from January to the end of June 2024, 178,942 sole proprietorships in Poland suspended their operations, and 99,331 closed them completely. Adding information on how many companies started operating during this time (150,442) and resumed them (102,570), it turns out that 25,261 of the smallest enterprises disappeared from the country’s economic map. In June this year, the balance was negative for the first time since February.
Customers with limited trust
In Q1 2024, Polish GDP grew by 1.9% compared to 0.4% in the same period of 2023. Despite the gradual improvement in the economy, sole proprietors are struggling to cope in a highly competitive market. The latest scoring conducted by KRD is also not optimistic.
– In June, we analyzed the creditworthiness of all sole proprietorships in Poland and it turned out that over the year the percentage of the most creditworthy decreased by 6.2 percent. The number of companies with the worst scoring increased by approximately the same amount. The situation is even worse in the case of the analysis of 1.25 million of these companies, which were verified in the KRD by their contractors and service providers last year. In their case, the percentage of those with the highest creditworthiness rating decreased by 8.4 percent, while the group of companies in the three categories with the lowest scoring increased from 7.4 to 11.3 percent. Cooperation with them is very risky. Not only may they not pay for the purchased goods or services, but they may also not fulfill the concluded contracts because they will not have the money – warns Adam Łącki, President of the Management Board of the National Debt Register of the Economic Information Bureau.
Debtors have decreased, but debts have increased
Currently, there are 160.5 thousand self-employed entities in the KRD database. Although the number of those with financial problems has decreased by 14.7 thousand since 2022, their arrears have increased. Today, they amount to PLN 5.06 billion, while two years ago it was PLN 4.7 billion. The average debt of each of them is now PLN 31.6 thousand. Since mid-2022, it has increased by almost PLN 5 thousand.
The record holder, a construction industry entity from Silesia, has PLN 10.5 million to pay to a real estate management company.
Looking through the prism of specialization, the biggest financial problems are faced by JGDs operating in trade, which have to settle PLN 1.31 billion. Of this, PLN 695.8 million belongs to wholesalers, and PLN 617.7 million to retailers. Financial liquidity is also a challenge for transport companies, which have arrears of PLN 846 million, construction companies, where debts have accumulated PLN 790 million, and industrial companies – here the sum of overdue liabilities reaches PLN 497.8 million.
– The reasons for the debt of single-family houses can be found in several sources. Unpaid liabilities are largely to blame, especially those resulting from loans or leasing, the installments of which have gone up significantly in recent years. In addition, each industry has its own problems, which are felt twice as strongly in the case of small entities. Trading companies are threatened by intense competition and a decline in consumption. Transport is affected by expensive regulations and the crisis on the road transport market. In turn, construction and industry are being finished off by rising prices of energy, materials and semi-finished products – says Emanuel Nowak, an expert at the factoring company NFG. He adds: – As shown by the study “2024 from the perspective of micro, small and medium-sized enterprises”, among the greatest concerns related to running a business this year, every second respondent indicates an increase in the prices of energy, raw materials and materials, as well as an increase in labor costs.
The biggest problem is loans and leasing
Almost half of the arrears of JDGs, or PLN 2.35 billion, are liabilities to securitization funds that bought the debts from the original owners, mainly banks. Another PLN 1.5 billion are receivables to financial institutions – banks, leasing companies and insurance companies. On the other hand, PLN 440 million should be returned to wholesalers and stores, PLN 305 million to advertising agencies and consulting companies. The next place on the list of creditors is occupied by construction companies, which have to recover PLN 160.8 million, and fuel companies – PLN 165.4 million. Over PLN 142 million are debts to telecommunications operators.
The largest number of indebted JDGs operate in the Mazowieckie province, where 25.9 thousand companies have PLN 913.3 million to repay. The second is the Śląskie province, where 20 thousand entities have not paid PLN 634 million. The podium is closed by Wielkopolska, where 16.3 thousand debtors operate with PLN 548.3 million in arrears.
No plan for unreliable customers
According to data from the National Debt Register, self-employed companies also have unreliable clients who owe them PLN 545.2 million. Construction companies have to pay back the most – PLN 141.1 million, trade companies – PLN 77.5 million and industrial companies – PLN 62.5 million. Meanwhile, the latest study “Scenarios of SMEs for non-payment by contractors”, conducted by TGM Research on behalf of the debt collection company Kaczmarski Inkasso, shows that every third micro-company does not have an action plan in case the customer does not pay for the goods or services.
– JDGs usually stop at reminding about the payment deadline, and if the client does not settle the debt, they rely on their good will. Many of them simply wait for the money to be transferred to the account, but in the end they often do not receive it. It is worth knowing that a smaller scale of business does not mean that a small entrepreneur is in a losing position in a confrontation with a larger client. By showing their determination in pursuing payment, they send a signal that they want to be treated with dignity and receive remuneration for their work – sums up Jakub Kostecki, President of the Management Board of the debt collection company Kaczmarski Inkasso.
Source: KRD/Economic Information Office SA