Philadelphia’s small and midsize businesses are more vulnerable in an economic downturn than businesses of their size in other cities, according to a new report.
Pew Charitable Trusts, in collaboration with two Drexel University professors, analyzed the bill payments of small and midsize businesses during the last recession to determine how they could handle another economic downturn, the Philadelphia Business Journal reports. Philadelphia’s small and midsize businesses had more difficulty paying bills on time than other U.S. cities, indicating that they were less liquid and more vulnerable when the economy took a hit.
Small businesses are defined as up to 99 employees and midsize is 100 to 499.
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Late payments are an indicator of a possible business collapse, according to research from the Federal Reserve Bank of St. Louis.