Go ahead and help yourself to Minister Hoekstra’s deep pockets

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So far, 40,000 business owners have signed up for the 4,000-euro emergency relief scheme for sectors affected by the present crisis. Assuming they have filled out the paperwork correctly, the money will be in their accounts in three weeks’ time. It might seem a lot, until you realise the scale of the problems facing these businesses.

More and more business owners and property owners have clashed about the rent during the past few days. Sandra Phlippen Chief Economist ABN AMRO

Among the hardest hit are the hotel and catering industry, with at least 60,000 SMEs. On average, those businesses saw 75 percent of their revenue disappear as soon the government’s measures came into force on 13 March. Our figures are fairly accurate, based on an analysis of our PIN transactions in hotel and catering: compared with the PIN transactions during the same week last year and the year before, revenue is down by around 75 percent.

Retail and industry, two other sectors that have been affected very badly, account for a further 180,000 small businesses, which are also going under in large numbers. The sector organisation for retail businesses estimates the loss of revenue at around 80 percent.

So why are so few of them applying for financial assistance? Have they not heard about the scheme? I find that hard to imagine: if you own a restaurant and all your revenue has suddenly disappeared, this is probably the only thing on your mind. It might of course be that many business owners do not need any assistance: they might have enough reserves and prefer not to ask the government for help. Still, even that is quite unlikely. According to US data, the average SME in the retail sector and the hotel and catering industry has enough of a buffer to hold out for 15-20 days without revenue before going under.

If the situation here in the Netherlands shows even the slightest resemblance to these figures, those businesses will not get by without relief. It is now 4 April, and 22 days have passed since the cafes and restaurants were shuttered. More and more business owners and property owners have clashed about the rent during the past few days. Understandably, businesses are trying to keep their costs down, and it is only logical that property owners with sufficient reserves should help them out. Still, it is predominantly the large retail chains that are managing to successfully negotiate lower rents: small businesses do not have the same negotiating power.

So what can those businesses do? My concern is that flexible contracts will be the first to be ditched. In the hotel and catering industry, that means around 60 percent of all workers. It is essential that business owners should overcome their reluctance to apply for assistance from the government. So all of you business owners: apply for that emergency relief! If you don’t, the massive loss of jobs will mean that the economic downturn will cause a loss of disposable income and a further loss of revenue in your sector in the autumn. So go ahead and help yourself to Minister Hoekstra’s deep pockets.

Every week, Sandra writes a newspaper column for daily newspaper AD (in Dutch only), which can also be read here.

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