SHREWSBURY, Mass.—What percentage of small businesses carry consistent credit card debt?
A new report from Mercator reveals that almost one-fourth (24%) of small businesses carry card debt. The finding comes at a time when many small businesses report it is difficult to obtain a low-dollar small business loan.
Community financial institutions, which have stepped in to fill the void in small business lending as the big banks exited post-recession, are having a difficult time offering small businesses small-dollar loans due to the loans small profit margins, Raddon recently reported.
The Mercator study shows that half of all small businesses report carrying credit debt occasionally.
“Only 33% of consumers carry occasional credit debt. One in four small businesses have a loan with a non-bank alternative lender,” stated The Payments Journal in its analysis of the Mercator data. “For businesses, and especially small businesses, business credit cards are considered a financing tool despite the relatively high cost compared to say a bank loan or a bank line of credit.”