Glas Poduzetnika Survey on Level of Debt of Croatia's Entrepreneurs

April 26, 2020 – The latest Glas Poduzetnika (the Voice of Entrepreneurs survey in Croatia focuses on the level of debt its entrepreneurs.

One of the puzzles of the Croatian entrepreneurs’ image is also the exact information about the risk they take on, and on the level of exposure, they endure for their companies. On the outside, you will most often see income and profits, but the public rarely has a clear perception of their financial model and about what do they have to comply with for the company to function successfully. One of the interesting criteria, although somewhat complicated, is the level of debt that each entrepreneur has. We wanted to get the information about this segment, even imperfect, so we asked them, “How would you assess the level of their company’s debt?”

We collected the following answers:

Slightly less than the meager 8% said they are not in debt and that they have enough private property. Another 18.7% believe that if this situation continues, they will be in debt, although this is not currently the case. This segment stands a little bit better. In addition to them, we have more than 23% of entrepreneurs whose debts are average, and their liabilities are valued at half of the properties that they mostly financed themselves. To these, we add just under 7% of participants who say they are in significant debts and that most of the property was debt-funded. In addition to these all together 30% of entrepreneurs with debts (to a greater or lesser extent), we also have the largest category of more than 43% of participants who say that they are not in debt, but that they risked almost all private property for the business.

The level of entrepreneurs’ debts

I am not in debt, but I risked almost all private property for the company
I am in medium-sized debt
I am not in debt, but if this continues I will be
I am almost completely free of debt, and I have enough private property
I am in significant debt

We believe that this analysis gives a good idea of the realistic state that entrepreneurs are in. 43% of them risk that if this crisis drags on and there are no short-term quality measures, as well as long-term changes that will make business more manageable, they will lose everything they have. And 30% are already in serious debts, and any significant disruption and obstacle in business can push them over the edge. That data is consistent with all others, which warn that the already challenging state of the private sector is now even more compromised and that the consequences of inappropriate responses will be, as some have put it—of a biblical scale.