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Small Businesses Getting Squeezed from Both Ends

October 13th, 2009 by Jim Swift

A few weeks ago, The Wall Street Journal explained how small companies are getting paid more slowly by their large company customers while those same large companies are forcing the little guys to pay faster. Well, Cortera’s data is showing that the little guys are getting paid more slowly by their small business customers, too.

Our Small Business Index (SBI) shows that while small businesses (companies with less than 500 employees – the SBA definition) are improving, but they’re paying 25% slower than a year ago and 20% slower than the overall business average. It is also important to note the widening gap between big companies and small companies. Pre-recession, the measures for the average, small and big companies tracked in a tight range, but since late 2008 we’ve seen a significant gap open up. Small businesses have a 55% higher DBT than large companies.

This is a dangerous situation for small businesses and a bad trend for the economy as a whole. When the payment flow between small businesses slows, the resulting friction impedes their ability to plan, grow and sometimes even survive.

Tags: SBI, Small Business
Posted in Economy, SBI, Small Business, Smalll Business Index, Supply Chain Index (SCI)
Permalink: http://blog.cortera.com/2009/10/13/small-businesses-getting-squeezed-from-both-ends/

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3 Responses to “Small Businesses Getting Squeezed from Both Ends”

1. [...] Cortera™, a community-driven business information company, announced the publication of its September 2009 Small Business Index™ (SBI) report, a new monthly index of accounts receivable (A/R) activities covering businesses with less than 500 [...]

   - Small Business Cash Flow Strained as Fellow Small Businesses Slow Payments | Cortera
   October 13th, 2009 at 11:46 am

2. [...] sales confidence throughout the supply chain. Cortera’s Small Business Index – here’s the latest report – also measures average DBT (in addition to tracking A/R) among 260,000 small businesses [...]

   - Universal Recession Risk: Small-Company DBT | Big Fat Finance Blog
   October 14th, 2009 at 5:13 pm

3. [...] Sitemap « Small Businesses Getting Squeezed from Both Ends [...]

   - Dual credit crunch conspiring against a recovery?
   October 14th, 2009 at 9:26 pm

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