Pandemic drives business credit applications in Italy: +24.5% in 2020

The slowdown in the business cycle resulting from the coronavirus emergency has strongly influenced the state of business cash flows over the last year and, consequently, the trend in credit applications submitted to meet liquidity needs.

According to CRIF studies, the increase in demand in 2020 compared to the previous year was 24.5%, the largest increase recorded by the sector in the last 7 years.

Moreover, as evidenced by recent research by CRIF Ratings, almost half of Italian companies have had to deal with the shock caused by the pandemic starting from an already delicate liquidity position. Just 38% of companies were found to have cash holdings able to cover less than 50% of their short-term financial debts, added to which, 8% of companies had no particular room for maneuver. In addition, the companies with the most difficulties are typically concentrated in the most cyclical sectors exposed to consumer trends, which, not surprisingly, are also those most affected by the pandemic.

Sole traders, which represent the predominant component of the Italian business fabric, increased their credit applications by 27.5% in 2020, while for corporations the increase was 22.6% compared to 2019.

INCREASE IN AVERAGE REQUESTED AMOUNTS

Another significant finding that emerged from the most recent update of the CRIF Barometer is the increase in the average amount requested, which in 2020 was €80,941 (+22.7% compared to 2019) aggregated for both corporations and sole traders.

In 2020, in line with the previous year, a third of the total applications were for amounts below €5,000 due to the weight of applications made by small and very small companies.

For corporations, the average amount requested was €112,688 (+26.0% on 2019) compared to €29,834 requested by sole traders (+5.1%).