A survey was done recently to find out how small business use their credit cards. This survey reported among other primary uses 22 percent of the users used their credit cards for record keeping purposes while 20 percent used them because they are convenient. 18 percent of those surveyed liked the rewards earned with the purchases they made and 10 percent used them for short-term cash flow.
Others sited all of the above were extremely valuable in the operating of a small business. The surveys main finding is most small business owners tend to pay the balance in full at the end of each month. This information implies that owners of small businesses are not likely to make a purchase they are unable to pay off at the end of the month.
It has also been noted by Visa the surge in the use of credit cards for tax payment and tax preparations by the business owner. Visa also noted the tax preparations and other tax payment transaction are 3 times larger than the dollar amount on other purchases.
It is understandable for a small business to use a credit card to make tax payments because of a large account receivable customer base. They may experience a shortage of cash flow while waiting to get paid.
It has also been noted more and more entrepreneurs are starting their businesses with credit cards. Experts say, Self-financing your small business with credit cards is a faster path to success. An entrepreneur will avoid unscrupulous moneylenders who would attempt to take a controlling share of the company’s interest.
Read the fine print and compare the features and benefits of the various small business credit cards to find which one best suits your needs.