Many small businesses, particularly start-ups, often rely on business credit cards to fund costs and bridge gaps in cash flow. Unfortunately, business cards are not covered by the protections of the new credit card rules.

Credit cards have increasingly become the preferred financing choice for small business owners looking for short-term loans. According to a study by the National Small Business Administration, the number of business owners who used credit cards to finance their business increased from 49 percent to 59 percent in just the four months from December 2008 to May of 2009.

More than half a million new businesses are created each year, contributing greatly to the health of the U.S. economy. Unfortunately, the survival rate of business start-ups is not that great. Three out of four make it past the three-year mark, however, less than half (45 percent) make it past the first five years, according to data from the Kauffman Firm Survey.

Despite the economic stimulus package, credit markets continue to be tight, particularly for small businesses. According to a survey by the National Small Business Association, 42 percent of small business owners polled reported being unable to get the financing needed for their business operations. That’s an increase from 33 percent in December of 2008.

For many small businesses, credit cards have become an important means of financing day-to-day operations, particularly in the current tight credit environment. The percentage of small businesses using credit cards to manage cash flow increased from 44 to 59 percent in the four months from December 2008 to April 2009 alone, an almost 33 percent increase.

The sharp increase illustrates just how many small businesses have been forced to turn to credit cards because other sources of funding have dried up.