Released: July 07, 2008

Small firms struggle to pay credit card debt

Source: Simone Baribeau, Washington Post [Los Angeles Times] (Free Registration)

When Andrew Uribe started building his salsa-making venture, he turned to plastic for start-up money.

But the business didn’t take off as quickly as he had hoped. Now the entrepreneur in Ellicott City, Md., has three credit cards that carry a combined $30,000, is behind on his bank loan and has moved out of the industrial space he had leased.

Working out of a commercial space in Baltimore’s Lexington Market that friends let him use on weekends, he has the capacity to pack only 1,600 jars of his Emy’s Salsa Aji a month instead of 14,000.

Uribe’s minimum credit card payments run $325 a month—about 15% of his total monthly expenses—which he says mainly cover just his interest payments.

Watch the video: Small firms struggle to pay credit card debt