November 10th, 2009 by Alex Coté
The S&P is up over 50% since its March 2009 lows and yet for most of us, the leading indicators and large company earnings seem to defy the reality on Main Street. Newsweek offered a view on why such a gap may exist – and some indicators are emerging to focus on small business sentiment — but the fact remains that most prominent economic indicators fail to paint a true view of Main Street conditions. Last month we started publishing a small business index that takes a shot at filling the gap. Based on same criteria lenders and businesses use for determining credit viability, the SBI provides a view into the cash flow on Main Street. And just as Newsweek paints the picture of the Wall Street – Main St gap, the Cortera SBI™ shows increasingly divergent behaviors between the largest of businesses and the nation’s millions of small companies.
The result is a one sided recovery. The latest data shows that while big businesses have returned to their pre-recession levels of two years ago, small business still remain over 28% higher (paying bills later) than our October ’07 report numbers. Simply put, small businesses are still paying slower than big businesses in an effort to manage their cash flow. Without any additional forms of lending at their disposal, slowing payments is their last resort. The gap, while narrowing slightly in our October Report, still stands at over 38% slower for small businesses as compared to big businesses.
(No Ratings Yet)
Loading ...
[...] Cortera™, a community-driven business information company, announced the publication of its October 2009 Small Business Index™ (SBI) report, a monthly index of accounts receivable (A/R) activities covering businesses with less than 500 [...]
[...] same period the rate of payments made by big businesses have slowed slightly, closing what had been wide gap that had developed during the height of the [...]
[...] data. Combined this nominal improvement with a slight slowing of payments from big business, and the payment behavior gap witnessed earlier in 2009 had almost vanished – yet another sign that things could be returning [...]