The 30% interest rate on their small business credit card shocked James and Heather Hills enough to stop using it entirely in April.
The couple had turned to credit cards in early 2006 to get their Elgin (Ill.) startup, mhn Internet Marketing and PR, off the ground, after three loan officers told them that they wouldn’t qualify for a bank loan without capital equipment to put up as collateral.
So the Hills, who have no outside employees, took out a $50,000 home equity line of credit and two personally guaranteed small business credit cards.
While data on small business borrowing is scattered, indications show that entrepreneurs are increasingly relying on credit cards to finance their businesses, especially early-stage companies.
The percentage of firms using credit cards has jumped from 16% in 1993 to 44% today, according to surveys by the National Small Business Association, a trade group. In the same period, the proportion using bank loans dropped from 45% to 28%.
A Federal Reserve survey showed that the percentage of firms using business credit cards jumped from 34% in 1998 to 48% in 2003. And numbers from the NSBA and the Fed show that between 20% and 30% of all small businesses carry a revolving credit-card balance, rather than paying their bills in full each month.
Over the last decade, credit-card companies have courted small business owners as issuers try to expand beyond the saturated consumer card market. Some 12% of the 6 billion credit-card offers mailed each year promote small business credit cards, according to Mercator Advisory Group, an industry researcher.
That’s 720 million offers, or roughly 26 for each small firm in the U.S. “As issuers have discovered the small business segment, they have become fairly aggressive about getting small business cards into the hands of some very early-stage businesses,” says Mercator analyst Ken Paterson.
Photo by LotusHead.
Commercial Capital Training
Welcome to Commercial Capital Training Group Own Your Own Finance Business By Completing Our Comprehensive Commercial Loan Broker Training Program Commercial Capital Training Group, LLC 90 State St. Suite #1500 Albany, NY 12207 Commercial Capital Training Group has developed a one-of-a-kind commercial loan broker training program that allows you to own a commercial finance company. With […]
e² Young Engineers
If you love children, you are going to love this business! Our programs teach science, technology, engineering and math to children and we have fun! Background: We are e² Young Engineers Young Engineers enrichment programs combine education + entertainment = edutainment. We created a variety of different programs that can be used to teach science, technology, […]
Open A Boutique
I Will Teach you How to Open a Boutique Have you always wanted to share in the excitement of owning your own clothing, accessory, gift, children’s, maternity, bridal or shoe boutique – either online or brick and mortar? Are you crazy about fashion, motivated and do you want to learn what it takes to get […]
Cell Routes USA
We Are Cell Routes USA & we are taking the world by storm!! Are you aware that today, 99% of people ages 14-80 have a cell phone? And what do you need all the time when you have a cell phone?? Accessories!! Our BOLD, BRIGHT & HIGHLY ACCESSIBLE Displays literally sell the product for you. […]
Owner Financing is a Multi-Billion Dollar Untapped Market and it occurs in about 10% of all home sales in the U.S., and it’s growing in popularity every day. Our company has been in business since 1997 and is one of the largest buyers of Owner Financed Real Estate Notes in the country. We have created […]