Stark added, "If a business owner finds that they have overextended themselves using personal credit cards, they should seek the advice of a certified credit counselor.
Fort Lauderdale (PRWEB) December 05, 2011
By most accounts it would appear that we have begun to turn the corner and are slowly emerging from the recent recession, albeit slowly. Nevertheless, availability of credit to small businesses continues to lag behind the recovery. While small businesses have worked hard at reducing their debt, postponing nonessential expenditures, and creating new ways of increasing revenues, they are still experiencing difficulty qualifying for bank loans, restructuring debt and finding willing investors. Eighty-four percent of banks in the fourth quarter of 2008 reported that they had tightened their standards for business loans although this has just begun to ease. The Federal Reserve confirms this with a report released in October 2011 citing that loan standards were still tight for many classes of borrowers. A New Horizon Credit Counseling Services is a nonprofit debt management organization that has been helping consumers since 1978
Steven Stark, Chief Operating Officer of A New Horizon Credit Counseling Services observed, "Many small business owners when faced with the unavailability of credit to fund their operations have begun to charge purchases and pay for expenses on their personal credit cards." Indeed, many small business owners first turn to friends and family to secure the funding they need to continue their operations or grow them. But when that is unavailable, because many friends and family no longer have the resources to lend money, they have little choice but to use their own credit. Stark says, "Few small business owners see any distinction between personal and business credit cards because business cards are issued upon the strength of the personal credit of the entrepreneur, but funding a business with a personal credit card entails personal liability of the owner”. Stark's advice is to treat it as a loan and create a realistic plan to pay off the balance. Stark added, "If a business owner finds that they have overextended themselves using personal credit cards, they should seek the advice of a certified credit counselor. When the entrepreneur begins a debt management program, and the credit cards are included, the savings under the new terms from the creditors will ease the cash flow burden."
A New Horizon Credit Counseling Services is a nonprofit debt management organization that has been helping consumers since 1978. For more information about their programs, contact 1-800-556-1548. They can also be found on the web at http://www.anewhorizon.org, or reached via email at slieberman(at)anewhorizon(dot)org