Sole proprietorships (JDG) account for two-thirds of the indebted companies appearing in the National Debt Register (KRD) and owe creditors PLN 4.92 billion, up PLN 442 million from the end of last year and PLN 604 million from a year ago, according to KRD data. Micro-companies in the trade industry are in the worst situation, with nearly PLN 1.3 billion in debts, followed by transport companies with PLN 798 million and construction companies with PLN 775 million.
There are more than 163,000 microenterprises in the KRD database, which have 4.92 billion zlotys to give to their contractors, and the average debt of each of them reaches 32,200 zlotys, although a year earlier it was 27,000 zlotys. The situation was worst in the first period of the pandemic, 2020, when JDGs had PLN 6.5 billion to repay, and there were 194.6 thousand of them listed in the KRD, it was reported.
JDGs themselves also act as creditors and have PLN 900 million to recover from customers. The largest amount, PLN 385 million, is owed to them by commercial law companies – as a rule, these are medium and large companies. A not inconsiderable sum should also be given back to micro-entrepreneurs by JDGs themselves. It is as much as PLN 317 million. Interestingly, PLN 158 million is owed to them by consumers, it was also reported.
KRD BIG pointed out that the current economic conditions are not conducive to micro-entrepreneurs, with the main obstacles including, but not limited to: rising business costs, huge increases in fuel and energy prices and inflationary wage expectations.
“Entrepreneurs are particularly bothered by changes in the law, especially tax law, as well as payment bottlenecks. On top of that, more expensive credit and limited financing options do not help business development. One-person businesses often face unpredictable and irregular income, which makes it more difficult to maintain liquidity. Seasonality or fluctuations in demand also lead to budget shortfalls, which are particularly hard on small businesses. Debt is also affected by the departure of one large customer who provided stable revenues,” said President of the National Debt Register of the Bureau of Economic Information Adam Lacki.
According to ZUS data (active health insurance payers) cited by KRD, JDGs are the largest group of entities operating in the market. At the end of Q1 2023, there were more than 2.46 million of them listed with ZUS. In Q1 2023, more than 80,000 applications for the establishment of sole proprietorships were submitted to the Central Register and Information on Economic Activity. This is an increase of more than 6% year-on-year. In addition, an advantage was observed in the number of established businesses over those that were closed, influenced by Ukrainians who open their own businesses in Poland, it was reported.
Although the overall number of registered JDGs has been increasing over the years, it has decreased year-on-year. CEiDG data shows that last year more than 463,000 sole proprietorships were registered, more than 193,000 were closed and 347,000 were suspended. Thus, more than 77 thousand units disappeared during the year. Experts predict that the number of liquidations and suspensions will increase in the late Q3 and early Q4 of this year, because then the effects of the problems that have been building up in the economy for a long time will accumulate.
The list of creditors to whom micro-entrepreneurs owe the most money looks similar to that of large companies. They owe the largest debt, 2.27 billion zlotys, to securitization funds, which have bought back debts from the original creditors, mainly banks, as well as telephone operators and insurance companies. The second largest creditor of JDGs is the financial sector (banks, leasing companies), to which sole proprietors must give back PLN 1.1 billion. This tally illustrates that the biggest problem for micro-entrepreneurs is business financing – unpaid loans and leases are the largest part of their debts. JDGs also owe arrears to trade companies – PLN 485.7 million, advertising agencies – PLN 279.6 million and industrial processing companies – PLN 128 million, the material indicated.
Source: KRD, ZUS and ISBnews
