Why are we so much more lenient on business debt than personal debt?

It's due to the level of services and the amounts involved.

You have personal phone service that costs $50 a month? You can go to the phone company or the cable company. If you are late on one, and they harrass you and piss you off and you leave for the other, whatever, they are out $50.

You have a business phone service that costs $500 a month, or $5,000 a month, they don't want to lose that customer.

Plus, it's also easier for a company to beat a individual customer into compliance. For a company, especially a large company, there really is no one to beat up.

Yes, if you go too long without paying, the provider will cut the company off. See it all the time.

But recently, can't remember if it was on MT or the O-T, there was a thread about someone who worked at a Fortune 10 company, who basically told AMEX they weren't going to pay any AMEX bills until they were 90 days late (at no interest), and AMEX went along with it. Probably because the swipe fees alone make it worth it.

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I wish their was a better system for a corporate credit score.

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We tell our clients, all the time, the importance of checking references before selling anything on credit. But no one wants to turn down a sale so they don't bother, then they complain when it's 120 days to get paid.

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Have you communicated with the companies that owe you money to try to work out a system that helps you?

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Very important. We sell truckloads of goods we manufacture, that average mid $30K. While we run D&B and get credit references. Standard industry practice to grant terms, as the customers, use our products to make another product that they sell, mostly on terms. Asking what terms and what credit limits will you need, then you can make pricing and credit decisions based on that info.

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Why are we so much more lenient on business debt than personal debt?

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"WE" aren't lenient, it's the agreement between the two parties.

You the consumer are .000000000000000000001% of their revenue

Exxon Mobil is probably 5-10% of a bunch of companies revenue.

Wonder which one gets better terms.

Businesses also do not all get paid regularly like a salaried employee. Your average residential person gets paid every 2 weeks. Take something like a farm as an example, and the farmer doesn’t get paid until the crops are harvested. Construction company may not be paid until their build is complete.

So if you want to do business with those type of companies that are not paid regularly and equally, you have to be flexible. That has now grown to a lot of sectors that don’t deserve the flexibility but that’s how it is.