Is Your Small Biz Owed Cash?

COLUMBIA, Md. (TheStreet) -- Every business owner knows that success requires more than just making the sale. It requires getting paid. These days, that payment is increasingly past due.

Customers were delinquent by 6.6 days, on average, in the third quarter, up from 6 days a year earlier, according to the Credit Research Foundation in Columbia, Md. The food and lumber industries had the best luck in collecting payments quickly, with an average delinquency rate of 1.8 days. Business service providers had an average rate of 19.8 days.

Even when customers paid on time, businesses had to wait 42 days after they sent invoices to recoup their fees.

Late payments have become especially problematic after the downfall of lender CIT Group (CITGQ) (Stock Quote: CITGQ), which has made it harder to secure loans. Payment delays and lack of funding can be deadly to small businesses, at least the ones that rely on a constant source of income to maintain day-to-day operations and create new products.

More companies are buying credit insurance policies that guarantee a large percentage of customers' account balances if they are more than 90 days past due.

(CITGQ) Since the beginning of 2008, "we have seen an increasing demand in credit insurance by four times, especially by companies who have never been insured before," says Kerstin Braun, executive vice president of Coface North America, a division of Natixis. "The buyers are just weakened during the credit crisis."

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