Give Small Business Owners Credit……Literally

For many small business owners, around 1 million to be exact, May 30, 2009 is a day that will not be soon forgotten. You see, on that day Advanta cardholders were no longer able to use their credit cards to make purchases. As they were only given a couple of weeks notice, many business owners were left wondering how they were going to make payroll and purchases. Although this may seem like just a repeat of what has happened to consumers on a day to day basis, this is quite different and could have a major impact on our economic recovery. Unlike consumers, a business owner’s credit line can be compared to their business’ lifeline.  For them, their credit and their ability to make purchases is the difference between a healthy thriving business and the loss of their primary if not only income.

Since the economic downturn, many people have suffered from what seems to be a drought in lending, but none more than small business owners. For the past months, many business owners have seen a decrease in the number of credit card offers made available to them. This is due to the fact defaults on business credit cards have increased as consumers spent less. In the case of Advanta, they decided to cut off credit to cardholders after charge-offs increased dramatically.

Help for small business owners needing credit may soon be on the way however, as President Obama vows to help. Stating that small businesses are an essential part of the economy, he promises to revive frozen credit markets to increase lending to small business. With a two step solution in the works, this is what many business owners want to see, in order to get credit flowing again.