Cash Problems Among Small Business Owners
At a local party, a group of small business owners talked about how the Indian economy is doing. They said that even though reports say India’s economy is growing, it doesn’t really help their businesses. Each business is different, and their success depends on what industry they’re in. For example, electronics makers are doing well, but those in traditional industries like clothing are struggling.
Different Experiences in Different Sectors
Businesses in sectors like electronic components are booming, but others aren’t as lucky. Those making clothes for export are losing orders, and businesses in engineering and plastic packaging are having mixed results. Some are doing great, while others are finding it tough.
The Real Issue: Getting Paid
One big problem they all shared was managing their money. Getting loans from banks isn’t as hard as it used to be, thanks to fintech and digital lenders. But the real issue is getting paid by their customers, especially the big companies they supply to. Many are also waiting for tax refunds from the government.
The Problem with Big Buyers
Even though small businesses can get loans, getting paid by their big customers is a different story. There’s not much data on how much money these big companies owe to small businesses, but it’s a lot. Even though the law says small businesses should be paid within 45 days, this often doesn’t happen. Big companies find ways to delay payments, like taking a long time to approve an invoice or finding small issues to complain about.
The Reality of Payment Delays
These delays mean small businesses often wait months to get paid, giving big companies a lot of time to use that money for free. This is a big problem for small businesses, and it’s not really the banks’ fault.