American Express Unveils Small-Business Products
<H1> American Express Unveils Small-Business Products</H1>By Mary Ann McNulty
New York </I>- In an aggressive push to expand its relationship with small businesses beyond the traditional corporate card, American Express last month debuted two new revolving credit cards, discounted long distance service, lines of credit, an Internet site and business centers that will offer tax and financial planning services.
Noting the enormous growth in the small business sector, American Express developed a comprehensive package of services to meet the needs of this market. Although the U.S. government defines small businesses as those with 500 or fewer employees, Amex is defining its niche as firms with 100 or fewer employees that would need 10 or fewer corporate cards.
"The nation's 20 million small businesses are an economic powerhouse, accounting for 50 percent of the nation's private sector output and 38 percent of GDP," said George "Chuck" Farr, vice chairman of American Express Co., in announcing the initiatives. "Virtually all projections indicate that this growth is accelerating, yet small-business owners tell us that many of their needs are not being adequately met. Our goal is to do more for small business by meeting those needs."
Cards Offer Discounts
The new revolving charge cards include a Gold Corporate Optima Card and a Delta SkyMiles Corporate Credit Card, both of which offer a credit line of up to $20,000 and have an 8.9 percent interest rate for the first six months. Both also include discounts on purchases from Hilton, Hertz and UPS, and a buyer's protection plan on retail purchases. Using either card, customers will receive a detailed monthly management report that lists spending by employee and merchant category.
The Gold Corporate Optima Card is available without a fee and will carry an interest rate of prime plus 6.9 percent after the introductory period. Customers will receive discounts from travel suppliers. After the introductory interest rate, the new Delta SkyMiles Corporate Card will carry an interest rate of prime plus 9.4 percent for purchases and prime plus 12.9 percent for cash advances. The $55 annual fee will be waived for all Amex Small Business Corporate Card account holders.
For mileage junkies, the Delta SkyMiles Corporate Card offers a 5,000-mile enrollment bonus and a 50 percent mileage bonus for purchases of tickets on Delta, Delta Connection and Delta Dream Vacations, as well as one Delta SkyMile for every eligible dollar charged to the card. Those miles will never expire, as long as cardmembers travel one flight on Delta or Delta Connection every three years. Last year, Delta launched its first affinity card, the Delta SkyMiles Optima Card, which was targeted at consumers. Its new offering is one of only a few that offer mileage on a corporate card.
Beyond the credit cards, Amex is offering unsecured lines of credit from $5,000 to $50,000. The company also is planning pilot small-business centers to offer tax planning, cash flow analysis, financial reporting, employee and retirement benefits planning, and other services. These services already are available in Phoenix and will be launched in Chicago and Los Angeles in the next few months.
The telephone discounts with MCI offer new customers 20 percent off long-distance charges. Enrolled small-business cardholders will receive an additional 10 percent cash back on long-distance volume at the end of the first year and 15 percent every year after. New MCI customers will receive an additional 15 percent savings for the first three months.