Self-employed people, entrepreneurs and companies are wondering how long the coronavirus crisis will last and where to take financial reserves. Bet on the bank and a new loan, or restructure the current one? Is it time for a meeting with the investor and the opening of the topic of partial capital entry, or perhaps the sale of the company is already on the agenda?

A question mark still hangs over a number of industries, this time the crisis is directed mainly at the consumer sector. Private equity transactions are slowing down and new ones will depend on the sector in which they are located. In addition, those who stretch for a long time are threatened by the fact that they may not finish in the end. The situation is different from the 2008 crisis in that borders have been closed and other measures taken, which of course affects the ability to complete ongoing transactions or start new ones.

Analysts predict at least a 3-5% drop in GDP this year, the government plans a budget deficit of 300 billion, oil reflects low demand and is at 21-year lows. The current situation and the measures that accompany it are to blame. Certain sectors will feel the negative effects very significantly (eg the automotive industry), while others will benefit from it (eg e-commerce, technology sector) or will be affected only marginally (energy, construction).

"2020 will be a year of recession. But the question is how long and deep it will be, as well as for how many companies the crisis will eventually be liquidating. The next steps of banks and private equity funds will follow. For now, all that is certain is that investors will be more careful. However, investments are not excluded. ”- Dušan Ševc, Deloitte partner, transaction consulting

Given the crisis, companies are looking for alternative sources of financing and assistance in securing it. Owners see that companies are losing performance or affected by liquidity. It is therefore important that they realize the need to start working with a professional counselor, as soon as the initial symptoms appear, and not wait until the last minute. There are many more solutions and they can be less painful in terms of maintaining value or control over society.

Banks are in a different liquidity situation today than in 2008, they are in a good position to withstand the crisis. While during the credit crunch, the public looked at them as being caused mainly by commercial banks, today they are expected to be the source of rescue of the system on the way to overcoming the crisis. It is therefore unlikely that a "credit crunch" will occur unless the situation continues to deteriorate rapidly. The situation is different this time also from the point of view of the appetite of individual banks.

"Large banks are in a strong liquidity position today. And they can evaluate for themselves the state of their debtors. It is important for a healthy banking system that it does not undergo major offensive interventions that significantly limit property rights. ”- Marek Malík, partner of Jet Investment

"Banks are accepting new loan applications even now, they can't afford to stop financing. However, great caution will prevail in the case of acquisition financing, which is now a riskier type of financing, largely based on the future cash flow of the company. So the prudence of the banks will be in place. ”- Jan Brabec, Deloitte partner, transaction consulting

If a company wants to acquire another company, it must reckon with using its equity rather than financing, unless it has already had a pre-approved loan. Especially for companies that now have indebtedness of 3.5 times EBITDA and above, banks will proceed cautiously and generally look at larger exposures. Therefore, companies should look beyond the banking sector.

Among the funds, there will be a tendency to hold cash to have liquidity to solve potential problems of their portfolio companies or for new acquisitions. At the beginning of the recession, no one wants to invest, that is a well-known fact. There will be a larger offer of companies for sale on the market, which will have an impact on valuations.