"As small businesses across the nation are struggling to keep their doors open, the need for affordable and fair credit-card financing is critical," stated NSBA President Todd McCracken. "Credit cards account for the largest - and growing - single source of financing being used by small businesses today."
Conducted between April 27 and May 5, the survey showed that 59 percent of small-business respondents used credit cards in the past 12 months to finance their business, up from 49 percent in December 2008. This increase is occurring despite a rise in the number of small businesses reporting worsening credit-card terms. Asked to evaluate their credit-card terms over the last five years, 79 percent reported worsening terms - up from 69 percent in December 2008. Even more eye-opening: when asked if their credit-card terms had worsened in the last six months, a whopping 75 percent reported that they had.
The NSBA 2009 Small Business Credit Card Survey comes on the heels of passage of critical credit-card reform legislation in the U.S. House of Representatives and in advance of expected debate on a similar measure in the U.S. Senate. NSBA has been an active and outspoken proponent of credit-card reform, citing the ever-increasing reliance small businesses have on credit-card financing.
"In previous recessions, economic recovery has been led by the creation of millions of new small businesses. Unfortunately, today's entrepreneurs -unlike those of past recessions - are severely limited in their ability to finance a new business by leveraging the value of their home, borrowing from friends and family, or securing a traditional loan. This leaves one clear, often unattractive, option: credit cards," said NSBA Chair Keith Ashmus of Frantz Ward LLP in Cleveland, Ohio.
