More than half of U.S. small businesses are financially unhealthy, with a majority of those companies carrying revolving debt on their credit cards, according to a small-business card satisfaction survey by J.D. Power. The firm said that 51% of small businesses are financially unhealthy, with 61% of those businesses carrying revolving debt on their business credit cards and 63% borrowing with those cards to fund operating expenses.
More than one-fourth (26%) of all small businesses are credit-seeking heavy users of credit cards and payment plans, J.D. Power said. Among businesses that use credit cards, 63% of those with card debt are also financially unhealthy. At the same time, the survey found that 46% of small-business credit card customers described the financial state of their company as better off than a year ago while 49% described it as about the same. Just 5% said they were worse off this year.
Nearly half (49%) of small-business card customers said their card offers important benefits including priority boarding, free late checkout, free shipping, expedited security at airports and free companion tickets, according to J.D. Power. Slightly more than one-third (36%) said the rewards they earn help their business, a percentage that peaks at only 40% among those without revolving card debt.
