When the economy struggles and an increase in the default interest rate, the loan standard can be very difficult, especially for unsecured micro loans. Banks can proceed to small business courts during these times, but loans will become climbing uphill. There may be one source of financing, which will remain abundant and can be accessed even in difficult times: business credit cards.
Not long ago, in this situation, small business entrepreneurs do banks on business credit cards for their financing needs, according to the annual micro study of small business administration, which tracks trends in loans of less than $ 100,000. Even during the time when traditional commercial loans basically remain flat, small business loans can grow by 10 percent. This may be an indication of the success of the Bank’s small business campaign, offering as a large number of small business credit card packages or maybe even a better method used by credit assessment agents.
At present, business owners with a good stand on a personal credit card will not have problems getting approval for business credit cards. Even in cases where the credit history of applicants is less than sterling, business credit cards are still easier to obtain than ordinary commercial loans. When commercial loans are not at all available – and the opportunity arises – the rest of the fitback might be a business credit card. Business credit cards are basically a guaranteed credit pathway, and when banks attract unsecured loan offers, small business owners may not have other ways besides securing a business credit card.
Is financing with a wise business credit card?
This can be the ideal solution during crisis time. Business credit cards give you a decrease of 21 to 30 days on your money. You get a guaranteed loan – albeit with high interest rates. The institution you get from a business credit card is indeed very useful when payments from clients become through time, or when your business requires unexpected supplies.
This does not mean that business owners do not have problems with financing through a business credit card. More than some of them. You should not forget that while the average business owner generally does not carry large balances on a business credit card from one month to the next, the temptation to do so is very real and there is all the time. Most entrepreneurs are very responsible and wise people in handling their finances – but when their backs go up to the wall, most of them will do whatever they can save their business. Entering the balance on their business credit card can be one of the charming choices.
Except for extreme conditions, smart use and discriminating business credit cards might really help save business money. If you consider a savings program brought in many business credit cards, it is possible for business credit card users to get discounts on many services – couriers, car rental, office supplies, printing, and many others. When you work alone, you are always looking to save money. Business credit cards can help you do that.