July 26th, 2010 by Alex Coté
As we do each month, today, we published our latest report of small business payment activities (see chart below). After watching as the gap grew between the payment habits of large and small businesses throughout the worst periods of the recession, both indices have now converged into a tighter pattern. The SBI peaked out in December 2008 at 12.66 days beyond terms and now stands at 7.02 days – the lowest level since we created the index back in August of 2007. This kind of improvement in paying behavior is typically a sign of confidence, as owners and managers feel more comfortable with the expectation of replenishing cash as new business comes in the door. The latest survey results from the NFIB also support a more confident outlook. In May, the NFIB Small-Business Optimism Index recorded another advance, rising 1.6 points to 92.2. The largest index component improvements were found in expectations of economic conditions (+8 points) and plan to increase inventories (+4 points).
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