Financing challenges of the smallest of small businesses
americanbanker | December 12, 2018
When it comes to obtaining financing, owners of firms that employ only themselves would prefer to use loans or lines of credit, but more often than not they will resort to using credit cards. And the less revenue the business generates, the more likely it is to rely on the owner’s personal credit card, rather than a business credit card. In a survey of more than 5,500 single-employee firms, 45% relied on a credit card for external financing, compared with 27% that used a loan or line of credit, according to a new report from the Federal Reserve banks of New York, Richmond and Cleveland. Thirty-six percent did not use external financing at all.