Hamburg, May 26, 2020
CRIF BÜRGEL expects significant increase in corporate insolvencies due to the Corona Pandemic
After 10 years of decline in corporate insolvencies, the corona crisis will cause significantly more companies in Germany to slide into bankruptcy again in 2020, according to projections by the information service provider CRIF BÜRGEL. Last year, a total of 19,005 companies applied for bankruptcy; the number of insolvencies had therefore fallen for the tenth time in a row in 2019.
"For the current year, however, we expect a significant increase at CRIF BÜRGEL. Assuming that the effects of the Corona pandemic on the economy are as strong as in the financial crisis of 2008, we expect over 29,000 corporate insolvencies this year", explains Managing Director Dr. Frank Schlein. Before the outbreak of the corona virus, CRIFBÜRGEL was still expecting 19,500 cases for 2020.
In a scenario analysis, CRIF BÜRGEL compared the overall economic situation of companies in Germany and the corporate insolvencies from 2008, i.e. the peak of the financial crisis, with the situation in 2019. The factor generated by this calculation is 1.54, i.e. in the worst case, there could be 54 percent more insolvencies in Germany in 2020. Liquidity assistance and KfW loans are not included in the analysis. However, a large proportion of the aid is in the form of loans, i.e. debts that will have to be repaid at some point. This raises the question of how even hitherto successful companies, which due to their business model generated little profit and rather low reserves, should pay off additional loans.
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