Landscapers, pool builders, ski shops, tax preparers, garden centers, HVAC companies and beach-town restaurants all earn much of their year in a few months. That shape comes from their markets, and the strongest seasonal businesses plan their money around it. Spending comes before the season, revenue arrives during it, and fixed costs run all year. Financing chosen with that calendar in mind makes the slow months routine.

The seasonal cash cycle

Most seasonal businesses move through three phases each year.

  • Before the season, cash goes out for inventory, hiring, equipment, marketing and repairs.
  • During the season, revenue comes in and balances get paid down.
  • After the season, rent, insurance, core staff and loan payments continue while less comes in. It’s also when you plan, maintain and buy for next year.

Each kind of financing below fits one of those phases.

A line of credit for the whole cycle

A business line of credit follows the cycle closely. You draw before the season, repay during it, and keep the line open for the months after.

For example, a garden center draws on its line in February to fill the greenhouses, pays it back by June, and leaves the line open for the fall bulb order. It pays only on what it has drawn, for as long as it’s drawn.

Open the line during or just after your strong months, when your statements show the business at full size. A line opened then is in place before the next pre-season buy.

Working capital for one defined push

Working capital, often structured as a cash advance, is a lump sum repaid out of your sales over a short term. It fits a specific, time-bound need, such as a pre-season inventory buy or materials for a large job that pays at completion.

Check how the payments work in your slow months before you sign. If they’re a fixed amount each day or week, make sure they fit your quietest stretch. If the agreement ties payments to your sales, ask how and when they adjust.

Big moves in the quiet months

The off-season is when many seasonal businesses renovate, add a truck or open a second location. The crew has time, contractors may be easier to book, and the work is done before demand returns.

A term loan spreads a large project over years, and equipment financing uses the machine itself as security. Equipment bought in the off-season can be delivered, tested and familiar to the crew by the first busy week. Some lenders offer payment schedules that follow a season, with smaller payments in the slow months. Ask whether that’s available when you compare offers.

Time your request around your season

Lenders read your recent bank statements. Apply right after your peak, and they show your business at full stride. Apply in the deepest part of the off-season, and they show your quietest months.

For example, an HVAC company that applies in August, after a hot July, presents a strong recent picture. The same company applying in February shows its slowest stretch, though nothing about the business has changed.

Three habits help a seasonal request read correctly:

  1. Say when your season runs, up front, in a sentence or two.
  2. Offer a full year of statements, or last year’s same months, so the whole cycle is visible.
  3. Apply before you need the money, so the request isn’t racing a deadline.

If you do apply in the off-season, lead with last year’s same months and your peak-season deposits, so the lender sees the whole year next to the quiet stretch. For more, see what lenders weigh.

Build a cash calendar

A month-by-month calendar shows how much financing you need, and when.

  1. Write down last year’s deposits by month.
  2. List each month’s fixed costs: rent, insurance, core payroll and existing loan payments.
  3. Mark the pre-season purchases and the dates they’re due.
  4. Find the month your cash runs lowest, and how low it goes.
  5. Size your line of credit or working capital to cover that low point with room to spare.
  6. Update the calendar each month with what happened.

For example, a pool service company might find its cash runs lowest in March, after a winter of fixed costs and just before it buys chemicals and parts for opening season. A line sized to that March low, with room for a late spring, carries it to the first openings.

Questions to ask about your season

  1. Can the line be drawn and repaid as often as I like?
  2. Is there a fee on the part of the line I’m not using?
  3. Does the line have to be paid to zero for a stretch each year?
  4. If payments are fixed, can they change in my slow months?
  5. Which months of statements do you want to see, and does last year’s peak count?

Habits that make the slow months easier

  • Move a set share of each peak-season deposit into a separate account for the off-season.
  • Ask suppliers about early-order programs, where you order before the season and pay once it starts.
  • Pay your line of credit down to zero at the peak. Lenders like to see a line used and repaid.
  • Add work that runs opposite your season, such as snow removal for a landscaper or maintenance contracts for an HVAC company.

Restaurants with a summer patio or a tourist season face the same cycle, with daily card sales on top. See restaurant financing options for how they handle it.

Plan next season’s money now

Start with a business line of credit for the cycle, or working capital for one defined push. If your peak is the holidays, see financing for retail. Apply from the page that fits. Applying takes a few minutes and won’t affect your credit score. We’ll review your application and match you with the options that fit.