breaking

Middle-Market Suppliers Face Extended Payment Cycles as Large Buyers Preserve Cash

Middle-market logistics providers and suppliers are experiencing significant financial strain as cash conversion cycles have stretched roughly 30 days over recent years, according to RapidRatings' analysis of 27 industries across 170 countries. The squeeze stems from a widening disparity: larger customers extend payment terms to improve their own liquidity, while smaller suppliers maintain accelerated payment schedules to their vendors. Private companies comprise approximately 75% of major supply chains and face particular vulnerability. Elevated interest rates, persistent inflation, and rising labor costs erode operating margins. Private firms typically carry floating-rate debt that public competitors can partially hedge, resulting in higher leverage and diminished interest coverage ratios. Private equity investors have also extended typical holding periods to six or seven years, reflecting deteriorating exit conditions.