‘Tis the season when fun holiday pop-ups and winter wonderlands abound. Seasonal companies, or businesses that experience revenue fluctuations throughout the year, must strategically manage budgets, salaries, and inventories in preparation for their peak season to keep up the momentum. While true holiday-themed companies and cold weather-dependent businesses, irregular revenue patterns are not exclusive to the winter months; they occur anytime of year for various seasonal companies, such as costume shops and pool repairers. We’ll explore some common challenges seasonal companies face and discuss how an alternative short-term loan can provide a lifeline to keep businesses like these agile.
Common Cash Flow Challenges of Seasonal Businesses
The primary challenge seasonal business owners face is managing their cash flow during lean-income months, which could affect their ability to:
- Pay vendors, landlords, or employees on time
- Invest in new equipment or inventory
- Resume regular operations or scale
- Capitalize on timely investment opportunities
How Short-Term Loans Can Help Seasonal Business Owners
What is a term loan?
Business owners who don’t qualify for traditional lending have various alternative lending resources available, from factoring to asset-based lines of credit. A short-term loan may be a great alternative if your business does not fit the typical factoring profile or needs a significant lump sum. Like a conventional loan, business owners borrow a fixed amount and repay the loan over a set time frame. Here are other benefits of short-term loans may be able to offer you:
- Flexibility: Term loans from an alternative lender often offer flexibility and transparency in loan amounts, repayment terms, and interest rates. An alternative lender will work with business owners to understand their revenue patterns and industry-specific circumstances. At Primary Funding, we help entrepreneurs determine the appropriate amount to borrow and to structure repayments to correspond with income generation to minimize further debt accumulation.
- Increase topline revenue: A significant injection of capital can help a business owner invest in a crucial piece of equipment or expand during slower months to elevate their company.
- Non-traditional screening: Unlike conventional loan providers, alternative lenders typically review several factors besides credit history. At Primary Funding, we may review projected revenue growth and the presence of unique situations when helping business owners secure the capital they need.
- Quick financing: The term loan application and funding process can be relatively straightforward, which is critical when your needs are time-bound. At Primary Funding, we can review your application, credit history, and company’s financial position and provide funding for qualified requests within days.
The ability to adapt and thrive is a year-round priority for any business. If you face seasonal-specific challenges, a short-term loan may allow your business to fulfill regular expenses while scaling. Contact us if you would like to discuss short-term loan options and how we can tailor a solution to meet your needs.