July 16, 2009
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News: NSBA Report Sm Businesses Hurting
Small business owners are feeling overwhelmed by the depression. Managing soft sales and rising expenses have lead to depend more heavily on credit card accounts. Availability of credit has declined and interest rates and fees have increased. Many small business owners feel alone and lost. However, there is an agency that advocates on their behalf called the National Small Business Association (NSBA). The association which reaches out to over 150,000 small businesses across the country recently released their 2009 Small Business Credit Card Survey. The survey supports a need for lawmakers to take immediate action in finding a solution to provide affordable capital to the small business community. Additionally, the survey takes a look at how credit card companies are treating small businesses and its effect on the life of their business.
The survey showed that small businesses have become more dependent on credit card usage to finance daily expenses. In December, 2008 49% of the respondents indicated that they had used their cards within the past 12 months to pay expenses. In spite of a rise in the cost of credit, at the end of April 2009, that number rose to 59%. Respondents reporting a change in their credit card accounts during the past six months with an increase in interest rates and worsening terms came to an unbelievable 75%. Furthermore, 33% of the survey respondents reported that their bank had reduced their account credit line. Additionally, the number of small business owners having a more difficult time paying off their card balances each month has increased by 10%.
The survey validates the important role credit cards play in the life of a small business. Traditional forms of obtaining credit have become more difficult during the recession leaving small business owners very vulnerable and dependent on card accounts. The predatory actions of lenders have had no mercy for consumers or small business owners. Even after the signing of the new credit reform bill that aims to prevent such action, they have found loophole after loophole to continue sticking it to the consumer. The law will eventually ease some pressure for the consumer, but leaves the small business owner left to fine for him/herself. The NSBA has been an advocate for small business owners since 1937 and have committed to helping them fight this battle to victory.