Sources of small business funding are drying up, and everyone seems to have an opinion as to where small business owners should turn for their financing needs.  I’ve heard people talk about applying for government grants, while others stress the importance of angel investors. I even read an article the other day about Internet sites that enable person-to-person lending. The one source that a lot of people are mentioning, as well as the one that many small business owners are being forced to turn to, is credit cards.

Credit cards may be a more conventional way to go for small business owners, but they can be pretty costly. Interest rates are high and getting higher.

“Sixty-three percent of business owners polled by the National Small Business Association in August said the terms of their business credit cards have gotten worse in recent years. Last month a rash of credit-card holders with Advanta, a small-business card issuer, opened their bills to find their interest rates had abruptly tripled.”                                                                                                       —CNNMoney.com

I’m not saying that small businesses should swear off credit cards. Credit is hard to come by, and credit cards may be the only way to go. What I am saying is that small business owners need to carefully weigh all their options before charging up a storm.

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