Small businesses are being affected by the banking crisis of 2008/2009 in numerous ways. A hot topic is bank lending is which includes access to spending on credit cards. This goes well beyond borrowing – the emphasis is on being able to use cards effectively to keep business operations moving.
Banks have cut credit credit card limits for many small businesses – those that had $50,000 available may now have $15,000 and for companies with 10 employees sharing one credit line this is not enough to things easily. Paying down credit cards mid-month takes days to post and often goes unnoticed until a card is declined at the point of sale.
A prepaid debit card program like PEX Card enables businesses to “self credit” so that one lump sum of funds can be budgeted to meet the needs of the company uninterrupted. As cash flow needs fluctuate monthly, spending ability should be able to fluctuate too.
Because the PEX Card system is partly a cash management system, companies can predetermine the level of funding they want to deposit without any intervention or say so from a bank. The system has a primary account segregating funds from cards so only specific amounts of money are available to employees at any given time. And, since each prepaid business debit card has its own separate balance each person is limited within their budget amount, so there is control over the funds on hand. Take a look at our demo to see how it works.
Running a cash-based system in lieu of relying on a credit line enables businesses to stay flexible by funding their own spending needs when they need it without maxing out and scrambling for more money.