Only a limited group of entrepreneurs will run into financial problems due to the discontinuation of the corona support for the self-employed, the so-called Temporary bridging scheme for independent entrepreneurs, Tozo. ABN Amro concludes that from their analysis of the impact of the termination of that scheme.
“There is a small group of self-employed people who have had constant Tozo support over the past 12 months. That group of approximately 17,000 entrepreneurs could not get by without the support in September either. Yet there is not necessarily a man overboard yet, because we see in our data that, like many people, they have been able to save extra. There is also sector-specific support,” says Sandra Phlippen, chief economist at ABN Amro.
Scheme worked well
Through the Tozo, entrepreneurs received a supplement to the income up to the social minimum if their assignments were lost since the corona pandemic. On October 1, the government stopped all corona support, including the Tozo. Only the cultural and creative sector will receive extra money.
Based on deposits into accounts of entrepreneurs, the bank calculated that 1 percent of all entrepreneurs made structural use of this corona support in September. At the start of the corona crisis, this was still 18 percent, more than 323,000 entrepreneurs.
“The support has strongly absorbed the loss of income and that is what it was intended for. The scheme has worked especially well for entrepreneurs during the first lockdown in April to October last year,” says Phlippen.
It is mainly entrepreneurs in the catering, transport and cultural sectors that still need support, because they are still subject to restrictions. The bank therefore still expects bankruptcies, because, among other things, the number of bankruptcies has been kept artificially low due to the corona support in the past year.
Phlippen also expects that entrepreneurs with high debts will ultimately not be able to keep the company afloat.
“Companies will indeed go bankrupt now that the support has ended. If the demand from travelers does not return, bankruptcy can be inevitable. Take the taxi industry, for example, which already had a difficult time before corona, but after corona less use is made of it as long as people move less from home to work.”
The chief economist does foresee necessary adjustments after corona, because unviable companies should not be maintained with public money. “But I certainly don’t expect a dramatic bankruptcy wave.”
‘Small group of entrepreneurs in trouble due to the end of Tozo support’
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