Cash flow is the biggest ulcer for business owners and many say they would rather organize junk drawers, give up social media or trash their smartphone. Nearly half of small business owners say they would give up their favorite junk food for a year if it meant they didn’t have any cash flow issues for a year. Well, American Express (AmEx) has come up with a comprehensive solution to deal with this pain-in-the-tuchus.
To soothe the pain, business owners can now apply for a brand new, generous cash back business payment credit card, go way over the credit limit, and if necessary tap into a working capital loan for a little vig.
Blue Card & Cash Flow
The new American Express Blue Business Cash Card for small businesses has no annual fee, earns 2% cash back issued automatically as a statement credit. With AmEx Expanded Buying Power cardholders can spend beyond their credit limit without penalty and with the option to choose whether to carry the remaining balance with interest or pay-in-full. Under the Working Capital program, AmEx will quickly pay vendors for the cardholder and require repayment up to 90 days for a fixed fee.
Besides no annual fee, the new American Express Blue Business Cash Card offers a 0% introductory APR for 12 months on purchases and balance transfers. The 2% automatic cash back applies to all purchases up to $50,000 per calendar year and 1% automatic cash back thereafter.
Going Over-Limit & Cash Flow
AmEx Expanded Buying Power enables cardholders to spend beyond their credit limit without penalty in order to help pay for larger purchases, like inventory or equipment, as well as earn cash back on that spend. However, the amount over the credit limit is not unlimited. It adjusts with card usage, payment history, credit record, financial resources known to AmEx and other secret factors.
Short-Term Help & Cash Flow
With AmEx short-term Working Capital financing will pay U.S.-based verified vendor invoices via ACH within two business days, and require repayment back in 30, 60, or 90 days. Based on creditworthiness, fees (or prepaid interest or “vig”) range from 0.6% – 1.75% for 30 days; 1.2% – 3.50% for 60 days; and 1.8% – 5.25% for 90 days. Annualized this translates to rates between about 7.2% to 21.0% which is well below real vig interest rates charged by many factoring firms. The Working Capital program is available to enrolled cardholders with at least six months of account history, creditworthiness and other factors.
More Goodies for Cash Flow
Serial entrepreneur, Robert McKinley, who also serves as Senior Analyst of CardTrak, CardFlash and CardData, agrees with a recent AmEx survey finding business owners hate scrounging up urgent funds when there is plenty of cash in the pipeline, but don’t want get trapped in a high cost cash flow advance loan.
First-quarter American Express U.S. total credit/charge cards-in-force increased 5.5% year-on-year to 54.1 million in 2019, compared to 51.3 million for the year ago quarter, according to CardData.