Big Firms Prosper as Small Business Struggles

Record corporate profits suggest that the economy should be booming. But small firms — the main engine for job growth — still have it tough, particularly at the bank.

Politics isn’t the only schism in the United States. There’s also a big firm/small firm divide, with each side experiencing a different economy. It’s a trend that will persist through the end of 2011 and probably into next year as well.

For big firms, money is easier to come by. Looking to expand into new lines or to hire? Corporations are sitting on cash, just waiting for the right acquisition. Many big companies are also finding cheap financing. Google raised $1 billion at 1.25% for three years. Banks are keener to lend to large businesses.

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Jerome Idaszak
Contributing Editor, The Kiplinger Letter
Idaszak, now retired, worked on The Kiplinger Letter as its economics writer for 21 years. Before joining Kiplinger in 1992, he worked for 15 years with the Chicago Sun-Times, including five years as a columnist and economic correspondent in the Washington, D.C., bureau, covering five international economic summit meetings. He holds bachelor's and master's degrees in journalism from Northwestern University.