The commercial debt carried by small and medium-sized Spanish companies grew by 19.2% in the first quarter compared to the same period in 2022. According to the Cepyme Delinquency Observatory, these outstanding obligations amounted to 200,000 million euros. The report also warns that rate hikes have made financing more expensive, which could increase delinquency. The cost of the debt that is in arrears stood at 1,348 million euros and that of the one that is not, stood at 1,301 million. In fact, the document indicates that if both components are added, between January and March SMEs have faced a total annualized financial cost of 2,649 million euros, 97.5% more than in the same period of 2022.
Microenterprises—those with fewer than 10 employees—are the most stressed, as they have the longest payment periods and lead delinquency rates. Regarding the latter, last year they had the worst score, with 130.3 out of 100. The small ones (between 10 and 49 workers) scored 103.8; the medium ones (between 50 and 249 employees), 76.3, and the large ones (more than 250 employees), 35.6.
The Cepyme observatory shows that only 27.9% of the total amount billed by small and medium-sized Spanish companies was paid on time in the first quarter of 2023. On the other hand, the Default Rate on Installment Sales Invoices (IMFVP) chains its fourth quarter of consecutive year-on-year increase. According to Cepyme’s research manager and author of the study, Diego Barceló, this indicates that “people who have bought on time are having difficulties paying”.
The indicator, which is included for the first time in this edition, tries to analyze the tendency of companies to resort to invoice payment deferral agreements. The employers point out that the 51.5 points he scored in 2022 are not worrisome, but that the growth trend that he has followed in the last four quarters is. At the end of last year, the IMFVP was 71.1% higher than a year earlier, which represents the largest increase since September 2016.
By sector, in the first quarter of this year the highest MFIVP occurred in the areas of construction (168.6 points) and construction materials (136.8). The good news comes from the service sector. This branch saw the most pronounced reduction in delinquency thanks to the good performance of retail trade and the takeoff of vehicle sales.
Downward trend in payment periods
The average payment periods (PMP) increase with respect to the previous quarter from 80.3 days to 82.1 days. The employer attributes it to a seasonal increase and points out that the trend is decreasing. If compared with the same period last year, the average number of days that elapse between the receipt of a product or service from a company and the effective payment to the supplier, is reduced by 2.4 days, the largest contraction in the last 10 years.
Payment times have decreased in year-on-year terms, in eleven of the last twelve quarters. This dynamic is interpreted by the employers as “the result of prudent management of the companies’ treasury”, which tries to avoid getting into debt due to the increase in financial costs. By economic sectors, it is industry that registers the worst data, with 125.3 days, after an increase of 31 days compared to the same period of the previous year. The report explains that the rise in this sector is due to the strong seasonality of the electricity, gas and water subsectors, which present more delays during this first quarter.
Construction shows eight consecutive year-on-year decreases in its average payment term, which remains at 96.4 days. The most prolonged reduction corresponded to services, with an average payment period of 72 days, 15.9 less than in the first quarter of 2022. If the size of the companies is observed, the fastest when it comes to paying invoices are the small ones, that is, those with between 10 and 49 employees, with 78.6 days. They are followed by the medians, with 82.1 days, and the micro-enterprises, with 91.4 days.
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