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5 Loans for Seasonal Businesses

Learn about the different commercial loans available to seasonal business owners to keep the business running smoothly during peak season or while preparing for the busy period.

5 Loans for Seasonal Businesses

Running a seasonal business can be fun and exciting, but maintaining a steady cash flow can be equally stressful. Whether you need to raise cash in preparation for your busy season or to stay afloat during the off-season, a seasonal loan, seasonal line of credit, or another type of small business loan may be what you need to manage seasonal business fluctuations.

Seasonal Business Funding Needs

Whether you are just starting your business or in your 10th season, it is important to budget for your day-to-day operations, emergencies, and other challenges that could strain your bank account.

Here are some things to consider when forecasting the amount of money you need for your seasonal business.

Hiring. Whether you are ramping up or winding down your business operations, you will want help getting things started or shutting them down. Recruiting new employees and getting them added to the payroll can add expenses you may not be used to.

Inventory. Stock up and get everything set up and ready to go. When the business starts to pick up, focus on forecasting sales to avoid last-minute orders with expedited fees. Good business practice is to have at least a 15-day window when ordering new supplies, but it is best to figure out what works best for your company.

Marketing. Your marketing efforts may include newsletters, social media and website updates, signage, etc., to bring in customers and sales during your season. You will have to get the word out before, during, and after the season. Predicting expenses in advance and saving profits for marketing can prevent cash flow concerns.

Contingency Fund. You probably have a contingency plan or Plan B in place, so ensure you include a liquidity plan to handle any financial consequences. Look at past balance sheets or brainstorm worst-case scenarios to approximate how much of a rainy-day fund makes sense.

Seasonal Loan Options

You have analyzed your finances and have an idea of your operating expenses; now, find out what financing options are available for seasonal types of business to meet the unique financial peaks and valleys. Minimize the impact on your bottom line by securing the right business financing for your company.

1. Business Credit Card

Credit cards are ideal for smaller purchases like office supplies or recurring charges like utility bills paid throughout the calendar year. TDECU's Business Platinum MasterCard has no annual or cash advance fees and a quick and easy application process.

2. Business Line of Credit

Get access to cash for short-term funding when you need it most. A line of credit acts like a credit card but offers even more flexibility. Get money when you need it to manage the ebbs and flows of your seasonal business cash flow. Get cash, pay employees, purchase inventory –your line of credit is there when you need it. TDECU offers a business line of credit with low-interest rates.

3. Construction Loan

Construction loans are good options for your post-season remodeling or for real estate to make room for more people and inventory next year. Construction loan eligibility requirements vary depending on rates and terms. Look for Small Business Administration (SBA) loans with smaller down payment requirements when available.

4. Equipment and Commercial Vehicle Loans

Prepare for the seasonal rush of deliveries and pick-ups with a new van, truck, or trailer, or replace or upgrade the equipment that keeps your business running. Whether you need restaurant appliances, lawn equipment, or a box truck, equipment loans can cover 100% of the cost and typically have a quick approval process. With TDECU’s equipment loan, you can pay off the loan early with no penalty allowing you to own your equipment outright.

5. Short-term Loans

When you need an influx of cash to buy a large amount of inventory fast, and you know you will be able to pay it off quickly, a short-term loan may be a good choice. Short-term loans require little or no collateral, but you commit to repayment in just weeks or months.

Secure Seasonal Business Financing Before You Need It

At TDECU, we have financing options to meet seasonal and small business owners’ borrowing needs. Understand how a revolving line of credit, short-term loans, business credit cards, and other TDECU financing options can help you succeed on your seasonal business journey.

Find more information on TDECU business financing options in the Business Services section of TDECU’s Advice Center today. Reach out to TDECU today.

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