Cash reserves can help your business survive even when income is limited or halted.

One thing COVID-19 has taught business owners is that having cash on hand can mean the difference between weathering a crisis or withering in a crisis. But just how much money should you set aside in business savings? There’s no one-size-fits all answer.

As a general rule, a healthy business should maintain at least three months’ worth of operating expenses in a cash account. Six months would be even better. In an emergency, cash from a business savings account can cover expenses when income is limited or halted altogether.

For many businesses, setting aside funds for an emergency is easier said than done. If you don’t have emergency business savings, you have another option to keep  financially afloat: a business line of credit.

A Consumers business line of credit allows you to access funds easily through online banking. Many business owners use a line of credit to handle unexpected expenses and meet working capital needs. (Business lines of credit can also fuel business growth; see how they worked for Anna’s House.)

A pandemic like COVID-19 is just one way business income might be interrupted. Sometimes clients pay late or, worse, not at all. Other times vital equipment breaks down. Or, there could be circumstances like severe weather or power outages that prevent your team from working at all. Having quick access to funds in situations like these can alleviate the financial pressure until things improve.

The best time to set up a business savings account or line of credit is before you need it. Contact one of our commercial loan officers or call 800-991-2221 to learn more about Consumers financial tools that can help you manage your cash flow.

Do you have business banking questions? Contact our knowledgeable commercial loan officers online or call 800-991-2221. We’re also available to help in person at your local office.

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