Nine out of 10 small businesses looking for no loans

As the economic crisis of the new coronavirus takes shape and consolidates, small business owners report difficulties in keeping their business running. About nine out of 10 (86%) entrepreneurs who have sought credit during the last month have had the loan denied or still have applications under review. The figures are part of a survey released on Tuesday (19/05) by Sebrae and the Getúlio Vargas Foundation (FGV). The survey refers to the period from April 7 to May 5. During this period, 38% of the entrepreneurs interviewed said they applied for credit. In the last survey, this rate was eight percentage points lower: 30%. Sebrae financial services analyst Adalberto Luiz points out that the difficulty for small companies to get credit has always existed, but has worsened with the outbreak of the new virus. "This difficulty has been noticeable for some time. At this time, however, with the pandemic, there is no doubt that this difficulty of access has worsened, due, for example, to the lack of revenue of these companies", he analyzes. Small and medium-sized enterprises have taken only 21% of the total value of new loans since the start of the spread of the new coronavirus, according to Febraban data. Adalberto points out that the high percentage of credit negatives is due to the fact that many entrepreneurs seek only large institutions. According to Sebrae's research, public banks account for 63% of credit demands, and private banks, 57%. Credit unions, however, only 10%. "Look for other alternatives, don't just stay in the big companies," says Adalberto. Following this logic, the consultant Artur Lopes, partner of IWER Capital, a management company for business recovery and consolidation, draws a roadmap to be followed in this search. The ideal, according to the expert, is to look for more structured credits, such as in development banks. This is the case, for example, of BNDES and some regional ones. "These are institutions that aim to feed economic activity," he summarizes. Then, already with the negative of banks such as Caixa Econômica Federal and Banco do Brasil (BB), it is time to run for small institutions. As an example, there are credit unions, which are formed by a group of people to provide financial services exclusively to members. Another good alternative is fintechs, which even have much lower operating costs compared to traditional institutions. "If there is no longer the possibility of having credit, there are credit rights funds (Fidcs). These are funds that have an additional character and can operate with a lower rigidity", explains Lopes. Professor of Innovation and Digital Business at Ibmec-DF, Marcelo Minutti questions, however, whether really seeking credit is the best option for the moment. It presents another move: to look around and identify opportunities that might be better for the company than a loan. "You have to be aware that change is inevitable and create new revenue lines. I call it business Darwinism. It's not the strongest that will survive, but what is able to adapt", he says. "It's much better than taking credit and paying the bills for a month or two," he says. "It may be that it is only prolonging a suffering that will end up up there in front," he concludes.