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Data for today’s episode is provided by Mercator Advisory Group’s Report: Small Business Credit Cards: Growth Opportunities in a Post-COVID World
How Small Businesses Prefer to Meet Their Business Credit Needs:
- 53% of small businesses prefer to use a business credit card to meet their business credit needs.
- But while small business cards answer to many small business needs, other channels also come into play.
- 16% of small businesses prefer to use closed-end loans paid in installments to meet their business credit needs.
- 11% of small businesses prefer to use a revolving line of credit from a bank to meet their business credit needs.
- 5% of small businesses prefer to borrow from personal assets to meet their business credit needs.
- 4% of small businesses prefer other sources of credit to meet their business credit needs.
About Report
Mercator Advisory Group released a report covering the credit cards issued for small businesses titled Small Business Credit Cards: Growth Opportunities in a Post-COVID World. The research explains current markets, reviews programs offered by top issuers, and suggests that issuers look at four current fintech models to revitalize their view of this rich market. With two thirds of the U.S. GDP driven by small businesses, there is a large audience to harvest. Program designs need to do more than just generate reward points; they need to provide the small business owner with tools to reduce costs, understand their spend, and prepare the small business for growth.
The research explains how fintechs are redefining the small business card space and what traditional issuers need to think about over the next three years.
“Fintech Buy Now, Pay Later should be a learning experience for all credit card issuers,” comments Brian Riley, Director, Credit Advisory Service, at Mercator Advisory Group, and the author of the research note. Riley continues, “You cannot keep doing the ‘same old thing’ or new players will disrupt your model. Small business credit cards are more than just reward generators. Issuers need to keep the product engaging with tools and value-added features.”
