British owned businesses on Spain’s Costa del Sol & Costa Blanca are now working on “cash upfront” as the economic crisis hits hard and businesses fail daily
British owned businesses on Spain’s Costa del Sol & Costa Blanca are now having to pay for all supplies upfront as credit lines are cancelled by concerned suppliers.
The trust levels have disappeared on Spain’s coasts where British ex-pats apply their trade, according to a drinks supplier based in Alicante, Derek Payne, who claims that British business owners are at least 70% behind paying suppliers.
In a normal thriving industry, businesses of all kinds, run their operations with allowed credit lines for the stock, but now suppliers fear they will not see their money back on many occasions as businesses are forced to close daily.
Mr Payne told Global247news how he feels the risks aren’t just worth it as he said: ” The risks of running credit lines are just not worth it anymore, I would say 70% of businesses are late settling their invoices, the margins for me are just not worth it and not high enough to cover losses when a business closes down”
“We personally have stopped all credit lines now, it’s simply cash upfront if businesses wish to trade with us, no cash, no delivery”
“I do feel for the business owners, I really do, but the crunch is I guess who do you pay first? – the landlord or the drinks supplier? – as in our case, in normal circumstances it’s not a problem, in general, the business owners take the stock in, sell it, then pay for it, but with limited business available now and cash flow tight, I guess it’s a case of who to keep “sweet” first”
“Also bars and restaurants are just closing down overnight, never to be seen again, we’ve been caught 9 times already this month, thankfully not for large amounts but the risk is there and I can only see it getting far worse”
” It’s not just the drinks and food supply businesses either, I’ve heard from various different business owners in different markets who are struggling to get payments in that are due, they are now doing the same, no money upfront then supply stops, although they have the hassle of collecting dues, one pal is talking of setting up a register where suppliers can list who owes them what and publish it,” he said.
In Spain, the financial crisis is set to deepen further, the normal peak season is now over, and businesses face even further restrictions from the governments affecting hard many operations that have survived so far, hotels are not open and many that do normally open for the winter trade aren’t this year, whilst airlines due to lack of business to Spain, cancel flights.
Spain’s government seem to be in a complete dither of how to tackle the current second wave of Coronavirus and it’s not instilling any confidence to British business owners in Spain
“We just don’t know what’s coming next, it’s another hard rule after hard rule, it’s lockdown conditions really without actually being locked up behind a door,” said Scotsman Mark Sutherland in Fuengirola on the Costa del Sol.
“It’s a no-win situation for sure at present, with no light at the end of the tunnel for many, we are doing ok, nothing special but being Scottish we have been very frugal and have always paid on the nail to obtain best prices on supplies anyway, but I have heard of many cases of supplies drying up for some and suppliers complaining of unpaid debts”
As September approaches in Spain, the month of September is make or break for many, the country has many decisions to make, will the schools reopen? – how to contain the second wave of COVID-19 and more importantly for British business owners, get back on the “safe list” with other governments.
CurrentlyBritish business owners are miffed as they see neighbouring Portugal have restrictions lifted as the British public flock in numbers and feel Spain has to react to be in the same position if their businesses are to survive at all.
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