We All Know There’s No Such Thing as a Free Lunch, But it’s Really Getting Ridiculous!

No More Company Lunches for You, Mr. Small Business Owner!

Thinking about taking your clients out for a business lunch or hiring some new employees? Are you ready to expand your small business? Well, because of the new crackdown on credit limits, if you’re a small business owner - think again.

According to the National Small Business Association, 59 percent of America’s small businesses rely on credit cards for daily operations. This number is almost triple what it was just 15 years ago! Over the past six months, credit limits were cut abruptly (some for credit delinquents, of course, but some just for the average small business owner) and now — forget about expanding — business owners have to find other means to just stay afloat!

Over the past few years, there was a push for small business toward credit cards — good deals, great marketing, no interest, fabulous rewards — and now, many are stuck. With the onslaught of surprise limits, many proprietors are reverting back to the old school methods of running a business: cash. Who knows? Maybe a little taste of traditional business is exactly what we need. As with most things, only time will tell.

For a positive perspective on the reduction of credit lines for small businesses, check out Is the Credit Card Squeeze a Blessing in Disguise?, in which Jay Goltz, small business owner and contributor to The New York Times, on his “You’re the Boss” blog, explains that cutting credit for small businesses may not be the worst idea. He recommends against carrying a balance no matter the scenario, and gives some suggestions on how to avoid such a situation. Definitely worth checking out!