Cash Flow Strained As Small Businesses Slow Payments

Quincy, Massachusetts and Boca Raton, Florida (PRESS RELEASE – October 14, 2009) — Corteraâ„¢, a community-driven business information company, announced the publication of its September 2009 Small Business Indexâ„¢ (SBI) report, a new monthly index of accounts receivable (A/R) activities covering businesses with less than 500 employees (the Small Business Association definition of a small business).

Measuring payment activities of approximately 260,000 small businesses, the Cortera September 2009 SBIâ„¢ indicates a growing gap between the payment behaviors of large and small businesses, with small businesses paying invoices 25 percent slower than a year ago and 20 percent slower than the overall business average. The data, which showed that small and big companies paid at approximately the same rate prior to the recession, now reveals that small businesses currently have a 55 percent higher days-beyond-terms (DBT) rate than large businesses (businesses with greater than 500 employees).

The new Cortera SBI data complements data reported in the Wall Street Journal in late August, showing that large companies had sped up collection activities from their smaller business partners while, in turn, slowing their own payments.

“The latest Cortera SBI data shows a concerning gap between the financial performance of small and large companies. While the economy is steadily improving, we are still seeing numbers that show small businesses are feeling the after effects of tough terms by their larger suppliers and a tight overall credit market,” said Jim Swift, president and CEO of Cortera. “As a result, small businesses are suffering from reduced and much needed working capital – a credit crunch that impedes their ability to plan, grow and in some cases, survive.”

The Cortera SBI tracks late payments against agreed upon terms, measuring late accounts receivable measured in days beyond terms (Average DBT) for businesses with less than 500 employees, comparing this data with equivalent A/R metrics for large companies (greater than 500 employees) and all businesses.

About Cortera

In a sea of business information providers, Cortera is different. With over 15 years of experience serving finance professionals, Cortera combines premium business information and innovative tools with a fresh community approach to commercial credit. It represents the first community for small business credit reporting and a fundamentally new way to capture the collective insight of millions of financial transactions. As a result, small businesses can make smarter, informed decisions to ensure optimal cash flow while attracting more favorable payment terms from existing and potential business partners.

For more information on Cortera, please visit

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Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

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