Saturday, February 19, 2011

Memo to Obama: Help the small biz little guy

Large companies are sitting on $ billions in cash, and how much of that is thanks to extending their payment terms from 30 days to 60, 90, or even 120 days to their small-business suppliers?

Big businesses are tying up small business's cash because they can, and its hurting job creation.

Jeffrey Leonard, CEO of the Global Environment Fund and chairman of the Washington Monthly, has a simple solution:

"[President Obama] can take a simple but meaningful unilateral action: issue an executive order mandating that all companies with federal contracts pay their suppliers within thirty days of invoice. Net 30 has long been the policy of the federal government itself in paying contractors. Virtually all major corporations today are in some way federal contractors, and they should be held to the same terms that they enjoy in their dealings with the federal government. Such an order would cost the government no money. But it would make cash flow faster down the value chain to small business suppliers across the economy, and this could free up more capital for job creation. And the symbolism of a president willing to stand up for the little guy being squeezed by big corporate America would be worth its weight in political gold!"

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