The newspaper Valencia Plaza has published an opinion piece by José Roca, managing partner of Kaizen Consulting Vlc, on the pressing need for financing that many companies will face in the coming months, especially as the grace period for ICO loans ends. Titled «And After That, What? When ICOs Are Not Enough,» this article analyzes the situation, explaining that «the Bank of Spain’s data on the growing risk of default on ICO loans is a strong alarm signal: in the last two months, loans under ‘special surveillance’ have doubled and now account for 16% of the total.»
José Roca predicts a short-term economic downturn due to worsening pandemic conditions and inflation, which would significantly increase the risk of default on ICO loans: «With all these ingredients in the mix, it’s evident that ICO loans will not be a sufficient lifeline for many companies. Therefore, it is crucial for any company, regardless of its current situation, to anticipate and plan for other financing methods to ensure the fulfillment of its business plan, whatever it may be.»
The managing partner of Kaizen Consulting offers advice in light of this forecast: «We recommend that all companies that relied on ICO loans to overcome the initial impact of the pandemic should now anticipate potential liquidity problems: it’s time to turn to new financial solutions, such as seeking other banks and exploring alternative banking options. The time to find solutions and alternatives is now, before the liquidity situation becomes unsustainable. This will be the only way to finance purchases and sales or to undertake necessary investments and operations.»
In José Roca’s opinion, it is time for companies to secure liquidity with foresight: «Fortunately, financial possibilities have increased, and there are new methods and new players that can provide interesting solutions for entrepreneurs hit by the pandemic. Companies must now be open to these new ways of financing before realizing too late that ICOs were not enough.»
You can read the full article in Valencia Plaza at this link.