Dry
More Credit Cards for Businesses as Loans Dry Up
As small business lending is drying up, a lot of banks are offering more credit cards for businesses.
CNN reports that banks are offering more credit cards for businesses in lieu of traditional small business loans. In fact, JPMorgan and Chase has introduced four new credit cards for businesses. All of them have interest rate that are up to 30%.
More credit cards are being offered because they are more profitable for banks — allowing them to charge (and hike) variable interest rates and charge penalties such as late fees.
The plastic financing mentality is catching on. CNN reports that 60% of small business owners have used a credit card in order to finance their small businesses. On the opposite end of the spectrum, only 45% of the same small business owners had a small business bank loan.
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