Small Business Trade Credit Signaling New Problems For Small Business Owners
Trade credit - lending to customers that is linked to product sales - is central to small business finance. Many small companies either extend credit to their customers, use the credit provided by their suppliers, or both. Because of the dual nature of trade credit, disruptions to it slow demand through the entire supply chain. So the trade credit system is an important window on what's happening to small businesses. Small business trade credit was adversely affected by the financial crisis. The question now is whether it's still hurting, or it's back to normal.