Finance companies in Slovakia have felt endangered since 2019 when the Regional Court in Košice, acting as a second instance court confirmed a lower-court ruling that a financial party could be qualified as a related party in the eventual insolvency of the borrower as debtor.

In response to the COVID-19 pandemic, the Slovak government and Parliament have approved another measure to help entrepreneurs overcome the negative impacts of this crisis on their businesses. The bankruptcy moratorium is an opt-in model and entrepreneurs are entitled to apply for such temporary bankruptcy protection subject to certain conditions. However, before applying various legal and business consequences should be assessed.

Who can apply?

In these difficult economic times, companies seeking additional liquidity may turn to alternative sources of financing. Companies with assets that can be monetized (e.g., accounts receivable, intellectual property, real estate, equipment, etc.) may discover a number of options available to them. In particular, accounts receivable financing may be an attractive way for certain companies to obtain working capital relatively quickly.