The Outlook for Business Credit Cards

Business Credit Cards are a substantial source of capital for small businesses. So how have current economic conditions impacted the ability of small businesses to access this important source of capital?

According to the April 2010 Federal Reserve Survey of Senior Loan Officers:

1. In the last 6 months only 2.9% of respondents indicated that credit card standards had eased while 32.3% had stricter credit card standards for new business cards.
2. In the last six months, 41.2% of respondents had increased the required credit score to qualify for new business cards. None had decreased the credit score.
3. In the last six months, 26.5% of respondents had lowered credit limits on existing business cards.
4. In the last six months, 26.4% of respondents have increased their frequency of closing existing business credit card accounts.

In summary, the access to capital via business credit cards continues to significantly tighten in spite of some possible improvement in the economy. Only, 11.1% of respondents indicated that an improvement in the economy is very important to an easing of credit standards and 33.3% of the respondents indicated that an improvement in the economy is not important to an easing of credit standards. Therefore, do not look for a significant easing of business card credit standards anytime soon.

Related Posts

 

Consumers are paying down credit cards and buying less

 

Recent survey contradicts bankers claim that loan demand is down.

 

Big Banks Loan Less to Small Businesses

 

Credit Strategies For You and Your Business

 

New Small Business Tax Credit for Providing Health Care Coverage

 

SBA ARC Loan Program to expire on September 30th