A mid-sized manufacturer lands a $2 million order for network servers. The client wants delivery in 60 days. But the manufacturer needs $400,000 upfront for semiconductor components and it doesn’t have the cash. Without financing, the order, and the opportunity, will slip away.
How does a commercial manufacturer or retailer maintain liquidity while growing sales and generating profit?
The answer lies in a strong banking relationship. Rather than relying on your own capital, the bank becomes your partner. It can provide access to lines of credit, asset-based lending, and traditional loans that free up cash for growth. This partnership is often the only path to scaling a business without draining reserves needed to keep operations running.
A lot of owners hate this part. Opening a line of credit feels risky, and it can feel like proof the business is under pressure. But without cash, no business can prosper—businesses need cash to buy inventory, fill orders, and keep moving while receivables are still out. One option is to put profits back into the business, which can work, but it also ties up cash. A credit line gives the business room to grow without making the owner cover everything out of pocket.
“In many cases, financing is actually a sign of strength,” says Lawrence Febbraro, Vice President and Senior Relationship Manager in Commercial Banking for Bank of America. “Healthy businesses frequently use debt strategically to accelerate growth, improve efficiency, invest in technology, acquire competitors, or expand capacity. Financing allows owners to preserve liquidity while pursuing opportunities that can create long-term value.”
But getting that credit line is its own process. The bank has its questions. It wants to know how the business is performing, how reliable its receivables and inventory are, and whether the financial reporting is strong enough to support the request. “We’re looking for a clear story,” says Febbraro. “A strong borrower can explain where the business has been, where it is today, and where it’s headed.” An accountant can help a business tell that story, serving as an intermediary between the owner and the lender. By preparing reliable financials and addressing underwriting questions, the accountant can make the funding process less daunting.
Some banks advance against receivables under a set aging threshold. Others lend against inventory. Some cap that borrowing. Others do not. It gets more complicated when it comes to asset-based lending, where the loan is tied primarily to collateral rather than the company’s overall financial profile. Asset-based lenders base financing on inventory and accounts receivable, and the amount available depends on the reliability and value of those assets. Because of this, accurate book values matter—understated inventory or receivables can reduce borrowing capacity and create difficulties during underwriting. Because of this reliance on collateral, more aggressive asset-based facilities can require monthly reporting, making timely and reliable financial statements essential.
For any form of financing, the financial reporting a bank relies on to move quickly includes clean books, credible projections, and a clear cash-flow picture. The accountant helps keep that information current and lender-ready, so the business can respond quickly when financing opportunities arise. With those materials in place before capital is needed, a business can avoid delays that put an opportunity at risk. Lenders consistently point to accurate, forward-looking financials as the difference between a fast approval and a stalled application.
The businesses that scale successfully are ones that invest in a banking relationship long before they need it. “A good banking relationship should not begin when a problem arises,” Febbraro notes. “It should be an ongoing conversation that supports the company’s long-term strategy.” In practice, that means starting the conversation well before a deal is on the table. Febbraro puts the window at six to twelve months ahead of when capital is actually needed, giving both sides time to evaluate options and structure something that fits, rather than scrambling to meet a deadline.
The basic formula for a growing a business is straightforward: Keep your books in order, work with your accountant, seek out a banker who understands your industry, and don’t be afraid to pursue financing with the help of a bank partner and an accountant that has your back.
This material has been prepared for informational purposes only, and is not intended to provide or be relied upon for legal or tax advice. If you have any specific legal or tax questions regarding this content or related issues, please consult with your professional legal or tax advisor.
