Statistically, many entrepreneurs and small business owners in Florida are at a disadvantage when it comes to their businesses remaining profitable and in business. In fact, according to U.S. Census Bureau and Labor Department data, only about a third of startups actually make it to celebrate 10 years in business. Even less make it to 15 years.
There are many factors contributing to this statistic. There was the recession where many people severely cut back on spending and many more started shopping at big box stores with coupons and highly publicized discounts. This, combined with the convenience of big box stores, also hurt many small business owners.
However, one of the many other reasons that small business owners struggle is due to credit card debt.
Quite often owners go into a business situation not realizing their options. For example, many owners think they can only use a business credit card. However, the truth is that small business owners can also use personal credit cards, which have more protections when it comes to lenders increasing the interest rates on non-delinquent accounts.
Additionally, many people ignore their own personal credit score when applying for business credit cards, which ends up hurting them. This is why small business owners should first request free copies of their credit reports to see if there are any inaccuracies or ways to improve an overall score. This could mean getting another personal line of credit and either not using it, or paying it off entirely each month in order to build credit.
Lastly, when it comes to using credit, small business owners should think before just adding on more and more debt. In fact, according to one study, for every $1,000 in credit card debt that a small business takes on, their actual odds of staying in business decrease by 2 percent.
Source: MSN Money, “7 Credit Card Blunders That Could Hurt Any Small Business,” Odysseas Papadimitriou, Oct. 23, 2012
- Our firm helps individuals and businesses who are struggling with credit card debt. To learn more about debt relief options, please visit our Orlando credit card reform page.