New figures from the Danish national bank show that Danish companies are drawing on overdrafts like never before. Lending on overdrafts has increased by almost 50 per cent, while ordinary loans have only increased by four per cent since December last year.
An expensive loan
The figures both worry and surprise Lasse Lundqvist, who is a consultant at SMVdanmark:
– That’s the biggest increase I’ve seen, and it’s worrying. After all, an overdraft is an expensive way to borrow money. These are typically short loans with high-interest rates. At the same time, we also see that more customers require longer payment terms, says Lasse Lundqvist.
Is the task worth it?
The month of November this year showed the highest number of bankruptcies in all the time bankruptcy statistics have been kept in Denmark, and economic experts have predicted that we are looking into a period of zero growth for at least the next three years. And in such a situation, you have to think really hard before submitting an offer for a task:
– You really have to count on whether it pays to take on the task. Material prices and transport costs are very volatile. And if you have to finance with an overdraft at a high-interest rate, it poses a big risk, says Lasse Lundqvist.
Have to lay off staff
To avoid ending up in bankruptcy statistics, you must keep your eyes fixed on the costs. And here, the personnel costs are a significant variable cost that you can screw up, and you better do that today instead of tomorrow if you have nothing to do anyway.
– After all, it has been a good time, so many have forgotten to pay attention to the costs. You must refrain from retaining employees for whom you do not have tasks. We see that productivity is falling sharply, and it may be too slow to make layoffs, says Lasse Lundqvist.
Continuing education and adjustment
It is a question of temperament and financial padding, how risk-averse you are in relation to retaining staff. Not least because the construction industry has become accustomed to the fact that qualified personnel are in short supply. And there are alternatives to sending the people home. One of them is to retrain your staff so that you can adapt the company to new tasks and markets:
– Building and construction companies, in particular, have good opportunities to adapt to, for example, energy optimization, which is currently in great demand, so continuing education – for example, at an AMU centre – might also be a good idea, says Lasse Lundqvist.
