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Finnish SMEs have survived the second wave of the corona without additional damages – except for tourism, restaurants and entertainment

Companies in the Finnish SME sector have managed to almost completely compensate the decline caused by the corona crisis.

The cost of the corona crisis for the Finnish SME sector has been EUR 2.5 billion by mid-December, but companies have managed to compensate the cost almost completely with their EUR 2.5 billion savings programs, shows Accountor's recent analysis of the financial situation of Finnish SMEs.

The SME sector has also tackled the effects of the second wave of the corona crisis and related constraints. In early December, there was a strong upswing in SME income.

“In particular, the retail sector’s recovery from the corona crisis is strong. It shows high consumer confidence and indicates a positive start to 2021,” says Niklas Sonkin, CEO of Accountor.

The revenues of the retail sector grew by as much as one-fifth in early December. Wholesale and retail sales have continued to grow since May, signaling that consumer confidence has remained despite the crisis. Some industries, such as real estate support services and IT companies, have even managed to save more than what they have lost in revenue.

However, there are large sectoral differences within the SMEs.

In crisis industries such as restaurants, hotels and entertainment, cost savings have not compensated the revenue losses. Many companies in these sectors have lost more than half of their turnover in the corona crisis, while studies show that most SMEs can withstand a fall in annual turnover of around 20 percent.

Small specialty stores are in big troubles. Currently 15 percent fewer shops do cash transactions than a year ago.

“There are a number of companies that may possibly not recover from the crisis, even if the restrictions will end at some point. When the temporary reliefs in the bankruptcy legislation end, we may see bankruptcies of these companies,” says Sonkin.

The SMEs are also divided into winners and losers in terms of their size. Accountor’s research shows that larger companies than those that employ 1-10 people have survived better than smaller ones and single entrepreneurs.

The size of the Finnish SME sector in 2019 totaled EUR 55 billion.

Based on the number and size of invoices sent, companies have become very cash-aware. They send invoices faster so that their cash register turnover speed is sufficient. The average size of the bills they send has also increased, which shows that savings are now being made, especially on cheaper purchases.