Credit and the Two-Speed Economy

Good article in CFO Zone on a New York Federal Research report showing that small businesses are still having a tough time getting credit. 

At the same time, large corporations are issuing debt instruments at record rates.  Key quote from a Bloomberg article on corporate borrowing:

"Borrowers have bolstered their finances by slashing spending and raising cash, selling $945.8 billion of U.S. corporate bonds this year, following a record $1.23 trillion in 2009 ..."

This borrowing has added to the "cash horde" being held by large corporations, which the article reports is "almost $1 trillion of cash."

The ability of large corporations to raise money while small businesses face a credit crunch is a key reason we are seeing a two-speed economy, with large corporations growing sales and profits while small businesses continue to be mired in recession. 

Comments

[Drums Sets]

On my own point of view to this case.that is not a very good thing for the small businesses. But that is actually the flow of the economy and there are no other way to revised those.for those small businesses they just might be needing a strategy how to improve their financial assistance.

[CFD strategies]

It is really true because big companies can have a fall back if there is a recession while small businesses are nailed to their growing debts. This is the flow of the economy. They call it a two-speed economy. this is a sad truth.

[solar motion light]

"Borrowers have bolstered their finances by slashing spending and raising cash, selling $945.8 billion of U.S. corporate bonds this year, following a record $1.23 trillion in 2009 ..."
The idea that was stated above is really an information feeder as well.