Managing cash flow and securing startup and growth funds are among the biggest challenges a small business owner faces in building a successful company. To help finance their development, entrepreneurs are increasingly turning to their last resort: credit cards.
According to the Small Business Association, the number of small businesses carrying debt increased by 25% from June 2004 to June 2005. Over that period the number of businesses carrying under $100,000 in debt increased from 15.2 million to 19 million. A full 70% of that increase can be attributed to credit cards.
The study also found that the total dollar amount increase was only 1.9% suggesting that the developing trend is a larger number of small businesses spending on small dollar amounts as supposed to existing small businesses increasing their spending amounts.
Even though the small business lending as a whole has been slowing down, Chad Moutray, chief economist for the SBA's Office of Advocacy feels that the "small business credit card market continues to be quite dynamic."
Does your company offer small businesses the option to finance their purchases by credit card and over a period of time? If not, you could be missing out on a rapidly growing trend that can help drive significant sales.
According to the Small Business Association, the number of small businesses carrying debt increased by 25% from June 2004 to June 2005. Over that period the number of businesses carrying under $100,000 in debt increased from 15.2 million to 19 million. A full 70% of that increase can be attributed to credit cards.
The study also found that the total dollar amount increase was only 1.9% suggesting that the developing trend is a larger number of small businesses spending on small dollar amounts as supposed to existing small businesses increasing their spending amounts.
Even though the small business lending as a whole has been slowing down, Chad Moutray, chief economist for the SBA's Office of Advocacy feels that the "small business credit card market continues to be quite dynamic."
Does your company offer small businesses the option to finance their purchases by credit card and over a period of time? If not, you could be missing out on a rapidly growing trend that can help drive significant sales.
Labels: cash flow, credit card, debt, financing options, SBA, selling to small business, small business association
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