Couple signing for business credit

9 Smart Ways to Use a Line of Credit During the Pandemic

5 min read • Sep 03, 2020 • Mary Kate Miller

A line of credit has long been the best friend of small businesses looking for flexible financing, and it’s become even more versatile—and essential—during the pandemic. Because you can borrow against the predetermined loan amount as many times as you need, a line of credit is like multiple loans in one. Here are some of the savvy ways businesses can use a line of credit to strengthen the business during the coronavirus pandemic. 

1. Make Bulk Purchase Orders

The coronavirus pandemic has thrown off standard operating in more ways than one. Changes to the USPS, business closures, and other safety-measure-related disruptions have caused shipping delays across the globe—and the supply chain. You may find that it makes the most sense for your business to place inventory orders in bulk. This can reduce your reliance on shipping timelines and can improve your customer experience. 

A line of credit can help you place the purchase orders that will best support your business, even if you don’t have the working capital to pay cash for the order. This allows you to make the choices that support your business health in the long-term. Once you’ve sold enough of the inventory to pay back what you borrowed, you can repay and free up that line of credit for the next time you need it. 

2. Fit Your Business for Necessary Safety Equipment

Face shields, personal protective equipment (PPE), and plexiglass dividers have become a business must-have for many industries. Properly outfitting your business with the necessary safety equipment can cost a pretty penny, and if you didn’t set cash aside, don’t fret. No one saw a pandemic coming. Instead, you can use a line of credit to finance these purchases, taking care of the health of your staff, customers, and your business’s finances in one fell swoop. 

3. Hire Cleaning and Janitorial Services

You may have found that you need to have your storefront or office professionally cleaned more often. Whether you need to increase the number of cleaning employees you hire or hire a service for the first time, a line of credit can help you meet those new expenses when you need them.

4. Cover Closure Costs

Many businesses have already had to endure one round of forced closures in the spring. While structural safety measures like mask mandates help reduce the need for closures, there is still a chance that your business may be forced to close its doors due to the spread of the virus. We’ve already seen some restaurants have to close for a period of time after employees test positive for coronavirus. 

We understand that’s a frightening possibility for businesses that are fighting tooth and nail against current economic odds, but it doesn’t have to be. A line of credit not only gives you a financial safety net, it provides you with the peace of mind to know that you’re prepared if and when new closures are necessary. 

5. Provide Extra Employee Sick Pay

Employees feel additional pressure to come into work, even if they’re not feeling well, when they don’t have sick pay. Providing additional paid sick days may make the most sense because it can help you avoid business disruptions while bolstering employee morale, which in turn may improve employee performance. A line of credit can give you the flexibility to offer additional sick days when you need to. 

6. Purchase Work-From-Home Equipment

If your business has transitioned to remote working, you may encounter additional equipment costs. When shared computers are no longer an option, you may need to ensure each employee has the necessary equipment to perform their work at home. You may find that internet limitations are interfering with your business options, so you want to upgrade employee modems/routers. You may need tools to keep customer data secure. Or you may be looking to finance standing desks to keep employees feeling engaged and active. A line of credit provides flexible financing for any of these equipment needs. You decide what you need and how you use it. It’s entirely up to you. 

7. Cover Payroll

Need help covering payroll? A line of credit can help. Whether you’re waiting on overdue accounts receivables or cash is tight because of PPE purchases, you can use a line of credit to ensure you don’t miss payroll. Once your working capital is replenished, you can repay and use the line of credit for other business needs. 

8. Purchase Assets

If you find yourself in a fortunate financial position, you may find yourself considering purchasing more assets because prices are low. A line of credit can help you access the capital you need so you don’t have to pass up that stellar business opportunity. 

9. Prepare for the Unknown

In 2020, uncertainty is the only guarantee. As planning for the future continues to be a somewhat nebulous undertaking, preparing for the unexpected can help fortify your business when surprises do arise. The beauty of a line of credit is that it can be used for whatever comes your way—bringing you as close to future-proofing your business finances as is humanly possible. 


Mary Kate Miller

Mary Kate Miller is a writer based in Chicago, IL. She specializes in covering finance (personal and business), investing, and real estate. Her mission in life is to give readers the confidence and the knowledge needed to grow their wealth by making financial topics more accessible. When she's not writing about topics like business loans, you can find her playing armchair financial advisor to the Real Housewives.