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A persistent myth: are small private companies really riskier than large public firms?(selected topic)

Business Credit

| June 01, 2008 | Danner, William | COPYRIGHT 2008 National Association of Credit Management. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Are Big Customers a Less Risky Bet? No!

It's often fun to challenge our preconceived notions, isn't it? For example, we all know that small private companies are much more likely to fail than the big famous firms of the Fortune 1000, right? It is a lot harder for a small firm to survive, right? Well, actually the statistics say the opposite is true. Over many decades, the probability of a big public firm defaulting has been higher, on average, than the risk of a small private company failing. And in bad times the risk of a big public firm failing is actually many times greater--compared to small private companies. Time to re-adjust your expectations and see the ...

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