For Cheaper Loans, Think Plastic

Entrepreneurs are accustomed to thinking of credit cards as financing of last resort. But with Fed Chairman Alan Greenspan pumping up rates on conventional loans, plastic is looking downright cheap--especially now that banks are in fierce competition to lure small-biz customers.

Rates on small-business loans rose to an average 9.7% by the middle of the first quarter, up from 8.9% last April, according to the National Federation of Independent Business, and plenty of borrowers pay double-digit rates. By comparison, small-business credit-card debt can be had for 9.9%, and some cards offer introductory teasers as low as 2.9%. Businesses can now choose from nearly 100 cards with credit lines running as high as $100,000, according to research firm CardWeb.

Can these cards really replace a bank loan? Possibly, as long as you're methodical about "rate-surfing." The trick is to keep switching between low-rate offers just before each introductory offer expires. The big caveat: Surfing can hurt your credit score if you ever do seek a conventional loan.