Millenial business owner holidng a plant

3 tips for using a business line of credit to grow your business

A business line of credit can help you manage cash flow while you grow. Consider these tips to decide if it's the right pick for your small business.

Owning and operating a business can be like tending to a garden. In some seasons, the rain falls steadily and the garden flourishes. Other times, you may find yourself in a dry spell, needing a consistent, dedicated source of water to care for your plants. A business line of credit works in a similar way, supplementing your business in abundant times and keeping the cash flowing through dry spells.


A business line of credit can be part of your organization cash flow strategy and growth plan regardless of your financial circumstances. However, when your organization needs funds to rebuild or grow, a business line of credit can become an invaluable asset.


It important to understand how a business line of credit compares to other financing options and how its unique features can benefit any organization.


1. Use a business line of credit to manage cash flow

A business line of credit is essentially another kind of small business loan. Typically, they are either term or revolving loans. Unlike traditional business loans, a business line of credit can be used for unspecified, general purchases. As such, a business line of credit affords your organization greater control over its cash flow.


Even if your organization doesn’t have cash on hand, a business line of credit ensures that you can buy what you need when you need it. Being able to immediately access funds provides your organization with a new way to manage its cash flow. In the short term, this means that you can stock your shelves, but it also offers the ability to weather unexpected economic downturns.


A business line of credit can allow you to maintain and expand your inventory, setting your organization up for future success:

  • Acquire short-term working capital to prepare for sales pushes
  • Purchase out-of-season products at a lower price from a wholesaler before you need them and then sell those products at a profit once they’re in season
  • Repay your line of credit once you’ve made a profit from your sold inventory


Deluge or drought, a business line of credit means you have a consistent source of funds to keep the garden growing so to speak.


2+ Tap into business line of credit features to monitor spending


Along with supporting new opportunities for your organization cash flow strategy and growth plan, a business line of credit allows your organization to set purchasing controls and monitor spending. By increasing transparency and simplifying purchasing, a business line of credit frees up employee time, so your organization can direct its efforts to value-adding activities.


Amazon Business offers two credit line options:

  • The Amazon Business Line of Credit is a pay-in-full credit line with 55-day payment terms with no interest or annual fees. Synchrony Bank serves and underwrites the credit line. 
  • Pay by Invoice gives eligible organizations access to a purchasing line with 30-day payment terms. Eligible Business Prime members may qualify for extended terms up to 60 days. 


Both options give you access to a variety of tools that allow your organization to maintain control over your cash flow and monitor purchasing. You can divide your total line of credit into sublines for individual groups or departments within your organization.


Also, you can easily customize which members of your organization have access to your line of credit. These features Ccn help employees follow company requirements, cutting down on administrative oversight and increasing transparency.


3. Start using a business line of credit before you absolutely need it

To borrow another horticultural analogy: “Make hay while the sun shines.” In other words, secure a business line of credit to manage your cash flow in times of plenty so you know how to use it in times of drought. 


Unlike a business credit card, a business line of credit purpose isn’t to make smaller, specific purchases. Instead, it provides your organization with an additional option for managing your cash flow. Having a business line of credit available should the need ever arise allows you to effectively and purposefully incorporate this tool into your organization cash flow strategy and growth plan.


Keep in mind it can take time to research your lending options and then apply. Different lenders might have varying criteria for your business to be eligible to apply and secure a line of credit.


Whether your garden is flourishing or needs a helping hand, a business line of credit provides you with the cash flow to keep your business blooming.


Discover payment solutions to meet your organization's needs

Product Updates