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02/11/2009 -
The credit crunch has squeezed many businesses out of loans and alternative financing options. However, there is a silver lining for businesses that offer credit card processing - an increased use of credit cards to finance business operations.With traditional loans drying up in banks across Canada, an increasing amount of small businesses are relying on credit cards to finance their operations. The same is occurring in the U.S., reported CNNMoney.com.
Credit cards have been easier to obtain than regular loans, and credit card companies have responded accordingly - JP Morgan Chase, for example, recently released a line of credit cards specifically tailored for small businesses.
"This is something that we are pursuing because we think it is a significant opportunity," Richard Quigley, president of Chase Business Cards, told the news provider. "We think small business owners are really the ones that are going to turn around the economy."
A recent survey from the National Small Business Association found that credit cards were the most popular source of financing for U.S. small businesses, used by 59 percent of respondents.
While this trend can make some small businesses anxious, it can actually be a benefit to cash flow and sales for companies in the business-to-business sector that offer credit card processing.
