Small companies lean more on credit cards

NEW YORK, Oct. 20 (UPI) -- The search for credit among smaller companies is more frequently ending up with a new expense on the company credit card, records show.

The National Small Business Association said that 28 percent of small businesses turned to banks for loans in the past 12 months, a record low, The Miami Herald reported Monday.

During the same period, 44 percent of those companies used credit cards to cover capital expenses, the Herald reported.

In the survey, 57 percent of the responding companies said their credit card terms had gotten worse in the past 12 months.

In a separate survey of 602 small businesses, 63 percent of small businesses indicated credit lines had tightened in September, compared with 50 percent that indicated they tightened in August, American Express OPEN data said.

Turning to plastic "is obviously a very dangerous thing to do,'' Marc Junkunc, a professor of entrepreneurship at the University of Miami told the Herald. "It can be very expensive financing," he said.