Early Warning Europe: helping small and medium-sized enterprises to survive and prosper
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Entrepreneurship and SMEsdate: 14/11/2019
According to the European Commission data, more than 200,000 companies a year enter into insolvency procedures, and less than half of businesses survive their first 5 years.
Launched in December 2016, Early Warning Europe's aims to help companies avoid bankruptcy by identifying which ones face difficulties and giving them relevant and timely advice and support.
Volunteer mentors provide businesses with support. They are trained on how to approach entrepreneurs in distress and find solutions to financial problems and other difficulties, and often, they have personal experience working in companies. This project brings together organisations and public institutions that provide services to SMEs in Belgium, Denmark, Germany, Greece, Italy, Poland and Spain.
Success story
During the last 3 years, the Early Warning Europe project helped more than 3,300 companies and built a network of over 680 mentors in 4 target countries (Greece, Italy, Poland and Spain).
The project partners have also actively promoted the early-warning approach throughout Europe. Thanks to this, early warning schemes are launching in 6 more countries: Croatia, Finland, Hungary, Lithuania, Luxembourg and Slovenia.
Early Warning Europe demonstrates that early intervention can rescue companies in financial difficulties and bring positive results, turning around their economic performance.
The project results also show that early warning schemes work in countries with different business cultures if services are delivered by organisations with relevant expertise and access to companies.
Background
In Denmark, where early warning services have existed for many years, around 50% of supported companies can be successfully turned around, and another 25 to 30% can be saved by preventive restructuring and/or downsizing.
The results of the Early Warning Europe project are in line with implementing Directive (EU) 2019/1023. It covers preventive restructuring frameworks, discharge of debt and disqualifications, and measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt.
Article 3 requires EU countries to ensure that debtors have access to early warning tools which may include 'advisory services provided by public or private organisations' alongside alert mechanisms and/or legal incentives.