Business Credit Card Use Hits Year High as SMBs Manage Cash Flow

Managing cash flow is an essential aspect of running a small- to medium-sized business, and business credit cards can be a valuable tool.

In October, 22% of Main Street SMBs used business credit cards to face contingencies, while 15% did the same in July, and 18% did so in April. Business credit cards were used more than any other working capital solutions, such as business loans or merchant cash advances for all three months.

By the Numbers

“Main Street Health Survey Q4 2023: eCommerce Protects Main Street SMBs’ Bottom Line in a Cooling Market,” a PYMNTS Intelligence and Enigma collaboration, drew from a survey of more than 500 Main Street SMB players across the United States. The study explored the key challenges and opportunities associated with the digital transformation these businesses are facing as well as their access to credit and financial sources.

The study looked at firms earning between $150,000 and $10 million in annual revenue that represented one of five different segments: retail trade, construction, professional services, consumer services and hospitality. The green bar of the accompanying chart shows the use of different credit sources by the aggregate of these five segments.

A Cash Flow Management Tool

The study found that around half of Main Street SMBs had access to credit in October. Among reviewed financing sources, business credit cards emerged as the preferred option to manage cash flow. Using these cards to finance purchases, businesses could conserve cash reserves by strategically planning payments based on cash flow.

Another way business credit cards can aid in cash flow management is through rewards programs. Business card rewards programs offer diverse redemption options, such as cash back or using rewards points to book travel.

In addition to financing and rewards, business credit cards can simplify budgeting and accounting. Many credit card issuers provide mobile apps that categorize transactions, making it easier to track and organize spending into actionable categories.

These benefits, together with improved cash management, have made these payment options increasingly popular.

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