Cash Flow Pinch for Growing Businesses? Get a Line of Credit NOW!

If your business is growing but still struggling with cash flow, you’re not alone. This is an extremely common issue and can be easy to solve.

Get a line of credit! And do it now. In this article, I’ll cover the signs that you’re having cash flow issues, plus how opening a line of credit right away can help some businesses.

At CSI Accounting & Payroll, we’ve provided monthly accounting and consulting services to small businesses for 60 years. We don’t offer lines of credit, but we recommend them. Business owners in a cash flow pinch often ask us:

• How do I know that my cash flow is too low?
• Why should I get a line of credit? Is there anything else I should do?
• Are there reasons not to get a line of credit?

How to Know if Your Cash Flow Is Too Low

How do you know if your cash flow is “in a pinch”? Here’s what CSI’s experts look for.

You can pay your bills each month with cash coming in, but you have very little or no cash leftover. You also don’t have any cash reserves, or they’re very small.

That means your hands are tied if you want to make a sudden purchase to benefit your business or are required to cover an emergency expense. So, how do you fix it? I’ll cover that in the next section.

What You Should Do

A line of credit is an immediate financial lifeline. If you’re a good candidate, open one with your bank or credit union today. Lenders prefer to lend when your business is financially healthy! You don’t need to borrow from it now (or ever), and you only pay interest on the amount used.

CSI’s experts recommend SBA loans as another one of the best loan options for small businesses. (Here’s how an accountant can help you secure a loan!) Just be aware that these have a lot of rules, fees, and restrictions that non-SBA bank financing does not have.

One final thing to note: No matter which lending options you choose, you still need a cash reserve cushion. You should use this before you borrow. Every business has a different comfort level for a bank account balance, but we say a small business should never dip below $5,000 as of 2026. Ideally, you’ll want to hold three to six months’ worth of operating expenses. If you don’t have this balance, prioritize building it by cutting all unnecessary spending.

What You Should NOT Do

A line of credit is not for everyone. Don’t get a line of credit if:

• You have bad credit. The same goes for if you’ve already borrowed money and haven’t paid that off.
• Your business is not making any profits.
• You plan to use it for the wrong reasons. Never borrow any money to pay your bills. Only borrow to expand, like upgrading equipment, acquiring another location, or other rare opportunities that provide a return on investment.

Avoid borrowing money from lenders who will not state an interest rate. These lenders charge daily or weekly payments based on future sales, with the unstated interest often being near 50 percent.

You may also want to avoid zero percent interest financing opportunities when dealing with things like large equipment repair, for example, since the interest is already secretly factored into the purchase price. 

Get Professional Cash Flow Management Help!

Still not sure about your cash flow management? CSI Accounting & Payroll can help.

Now that you know how to tell if your cash flow is too low, what you should do about it, and who should not get a line of credit, are you ready to check out CSI’s monthly accounting services?

To see if we can be a good fit for your business, click the button below for a free consultation:

Not ready to talk? That’s okay! First, learn what your monthly investment might look like by clicking the image below: