(Flickr credit card photo, Philip Taylor PT)
Have you heard the news?
Small business lending is still squalid in most areas of the US.
In other words, nothing has really changed all that much. The big banks are sitting on a ton of cash, and unless you’re a “perfect” (or near-perfect) candidate for a small business start-up franchise loan, you’re probably not going to be able to touch the green. That’s right; it’s still a bit challenging to get a loan.
But, it’s not impossible. Try here.
Current Franchisees Need Loans Too
If you’re already in a franchise business, and you need more working capital, or maybe you need to make some leasehold improvements-spiff things up a bit, you may not be able to secure the funds to do it.
Question: What’s a franchisee to do?
Answer: Use plastic
Here’s a famous quote that absolutely applies here;
“What it is -is what it is.”
If there are no other alternatives, and you’re franchise business isn’t getting love from the money fairy, you’re going to have to use your credit cards.
So what? That’s what you have them for, right? If you’ve been paying your bills on time, and you have a good credit score, credit card companies want your business. (Too bad most of the banks don’t) So, I say, “give them the business!”
Twelve Percent
I’m sure that you’ve heard of the 1 percenters. Well, if you decide to use your business credit cards for your business, you’re going to probably be a 12 percenter. That’s going to be your approximate interest rate, and if you don’t pay it off quickly, an abundance of rather unpleasant feelings will start to follow you around-month after month. (Until it’s paid off.)
For example;
Go ahead; I know you want to play around with it.
From Small Business Trends;
“According to the National Federation of Independent Business, 79% of small business owners use credit cards to run their business. It’s actually down from 2008 when that number was 85%. So it’s not only true that credit cards are a vital part of the overall funding strategy for small business owners, but in some cases, it’s the only form of credit they really have.”
Tom Gazaway, from Hawkeye Management, points out several other interesting credit card tidbits in his post, and if you’re a franchisee-reading Tom’s credit card use article will help you feel a lot better about using your credit cards during these strange financial times. Want to know why?
Because you won’t feel so darn lonely.
Are you using credit cards to help your business stay afloat? Are you using your credit cards for leasehold improvements?
Before You Apply For a Loan, Get This.
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At 12% interest seems franchisees using credit cards to fund their business are in over their head. Might be that upfront cost calculations need to be raised, so franchises stand any chance.
Thanks for the comment, Dave.
I didn’t say that it was a cheap way to raise funds-only a necessary way. (Sometimes)
And, using 12% was probably a little too nice 🙂
JL