How a Seasonal Business Can Use a Business Loan | Fora Financial Blog
How a Seasonal Business Can Utilize a Business Loan
April 13, 2018

How a Seasonal Business Can Utilize a Business Loan

Running a small business involves much more than simply trying to maximize positive cash flows. It also involves trying to allocate those cash flow in a productive way throughout the year.

If you own a seasonal business, then you likely recognize the importance of having ample cash flow. Although there’ll still be a significant amount of decision making required, using a business loan may make it much easier to sustain yourself in your busy and slow seasons.

Prepare for the Busy Season

There are several different types of seasonal businesses. For instance, perhaps you run a strictly seasonal business that closes its doors for a significant portion of the year. Typical businesses in this category include food trucks, golf courses, swimming clubs, and numerous others.

In comparison, you might run a business that’s characteristically seasonal. If this is the case, your business is likely open year-round, but cash flows are much higher in some months than they are in other months. A good example of these businesses could be a retailer that sells holiday decorations.

Regardless of what category your business falls into, all seasonal businesses experience higher cash flows in one part of the year and lower cash flows at other times. Since you often need to spend money before it can be made, applying for a business loan at the beginning of the busy season and paying it back at the end can be a very useful strategy.

Stock Up on Inventory

Just as your seasonal business categorically experiences uneven cash flows throughout the year, you also probably experience varying inventory needs.

Most likely, your seasonal business will have its highest inventory needs at the beginning of the busy season. However, by the time the busy season starts, many seasonal businesses—for example, an ice cream stand—will have gone several months without any positive cash flows.

A business loan makes it possible to reopen your seasonal business, even if you’ve spent all of the capital you saved the year before. Having access to capital even before revenue streams begin flowing makes it possible to expand operations during the most profitable time of the year.

Sustain Payroll Throughout the Year

Many seasonal businesses still require a year-round staff. Unfortunately, due to the challenges that come with uneven cash flows, it can be very difficult to pay your staff during the off-season.

By applying for a short-term business loan at the end of your primary operating season, you’ll have enough capital to afford payroll. For instance, if you need a winter groundskeeper for a golf course, you can pay them all year.

Pay Utilities and Maintain Facilities

Maintaining property, plants, and equipment can be amongst the largest expenses endured by small businesses. Even if your business operates with minimal or even no staff in the off-season, many of these expenses continue throughout the year.

There are many different reasons why your seasonal business might require capital during the off-season. If you’re renting property, then you’ll likely need to be paying their rent no matter what. Additionally, your facilities may need to be “winterized,” updated, or simply maintained. A business loan makes it possible to maintain the physical capital you’ve worked diligently to acquire.

Make Off-season Upgrades

Lastly, in preparation for when your seasonal business reopens its doors, a business loan can be quite useful for making necessary upgrades in the offseason.

A business loan can be used for improving software, buying new equipment, expanding to a new location, or completing other projects. With a low-interest rate business loan, your business will unlock access to a new world of possibilities.


Business loans can be useful for businesses of all varieties, but they’re exceptionally useful for business that operate seasonally. Loans can help your business have access to capital when you need it the most. Even if your business has shut its doors during the off-season, that doesn’t mean it’ll be operating without any expenses. A small business loan can help you sustain yourself and realize your full potential!

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Andrew Paniello
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Andrew is an experienced writer with a degree in Finance from the University of Colorado. His primary interests are investing, entrepreneurship, and economics.