Tuesday 22 September 2020

KvK warns struggling business owners not to dig deeper into debt

Photo: KvK

The chamber of commerce (KvK) has urged business owners not to sink into crippling levels of debt if their companies become unviable.

Despite the slump in spending during the coronavirus lockdown, the insolvency rate dropped to its lowest level in 21 years in August.

The KvK is concerned that the number will rise now that the government’s emergency fund to keep companies afloat has ended. Nearly €8 billion was distributed to 140,000 companies in the first round of the NOW scheme from March to May.

‘It’s very difficult to let go of your dream,’ Marije Hovestad, head of the KvK’s team of business advisers, told NOS. ‘But this complicated situation requires people to take a critical look at their business.’

Around 1.5 million people in the Netherlands run their businesses as a partnership  – either a VOF, CV or maatschap – which leaves them personally liable for any debts run up by the company. Hovestad said the KvK was keen to break the taboo on terminating businesses that are not viable.

‘We are seeing people starting up business now, companies that are recovering from the last few months and companies that won’t make it,’ she said.

‘We are getting calls from partners of entrepreneurs who are very worried. We want to let business owners know that stopping is an option.’

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