Clearly, the owner of a small business must take a different route to financing than the high potential, high growth entrepreneur. The myth is that they finance it all by credit card. While this may be true for many start-ups, USNews reports on a survey by Visa and SCORE that finds that only 21% of small businesses use business credit cards. The truth is that credit cards have not always been very convenient for small businesses. Traditionally the business cards issued to small businesses are really not very different from consumer cards.
Small-business owners don’t use their cards as consumers do, but they also don’t have access to capital as larger companies do. They may need credit, but many suppliers don’t accept cards, forcing business owners to pay with checks.
Credit card companies are finally beginning to understand the needs of small business and are responding by issuing cards that better meet their needs for access to working capital. I guess the 23 million small businesses finally got their attention.