Some 5% of Bulgarians run their own businesses

At a time of crisis, 5% of all Bulgarians fit for work run their own business, showed the annual report of the Bulgarian Small and Medium Enterprises Promotion Agency. Funding availability and intercorporate debt remain the two major problems entrepreneurs are grappling with.

There are 353,000 firms in Bulgaria, 92% of which are registered as sole proprietors or companies with up to 10 people on their payroll. However, this group of small businesses employ 620,000 of almost 2 million of the working-age population. The number of those firms, 40% of which are in the services sector, has dropped by 1% in a year.

One in four Bulgarian companies have overdue payments to suppliers or subcontractors – a dynamic that often leads to a chain reaction of failures.

Nowadays, 62% of small firm owners use primarily equity to develop their businesses, only 20% have a bank loan, a working capital line of credit or an overdraft, and 27% started out with loans from relatives and friends. The Bulgarian Small and Medium Enterprises Promotion Agency is preparing legislative changes to support entrepreneurs and firms on the lowest rung of the corporate ladder.

As of now, 54% of small- and medium-sized enterprises in Bulgaria are still considered in danger of going bankrupt. Only 3% of firms with up to 10 employees have been granted EU funds, the main obstacle being the requirement for co-financing under EU operational programmes.

Among medium-sized enterprises, with up to 250 workers and a much bigger turnover as a rule, one in four firms has secured an EU-funded project.

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