As a small business owner, you must understand the importance of cash flow- especially if you have a seasonal business. You must learn to make the most of your busy periods to keep you floating during your not-so-busy periods.

Sometimes, you may find yourself in need of financing such as a business loan, line of credit, or other type of funding to cover your expenses during the off-season. In this article, we’ll discuss what you need to know to improve cash flow with a seasonal business loan.

5 Things to Ask Before Obtaining a Seasonal Business Loan

If you don’t have the cash flow you need to cover your expenses and be prepared for an emergency, financing can help. However, you must ask yourself a few questions first:

What do I need the funding for?

Clarifying your reasons for obtaining the funding can help you determine how much you need. For example, is there something you need or want to purchase, or do you need working capital in case of emergency?

What is your cash flow situation?

Take some time to review your financials. Is it possible to shuffle some things around to free up some cash?

What are your revenue/sales projections?

Take a look at your projections through your busy season and into the beginning of the slow season to determine your revenue. You want to make sure that you will have the funds to make the loan repayment during your slow season.

Do I have time to wait for funding?

Approval often takes some time, so it’s important to determine if you have the time to wait for the funding. In some cases, it may be best to seek alternatives.

What are the costs/benefits of financing?

If you did not have the funding to order inventory, could you manage without it? If you believe that financing may make the difference between turning a profit or breaking even on your pre-season expenses, it may be worth it.

Tips for Using Seasonal Loans to Improve Cash Flow

If you decide that a season loan is a good option for you, there are a few things you can do to improve cash flow:

  • Hire more staff
  • Stock up or make an inventory rush order
  • Purchase/repair equipment
  • Boost marketing efforts

Do You Need Help with Your Business Cash Flow?

If you find yourself in need of capital to improve your cash flow, contact Monterey Commercial Capital. We can help you get the funding you need and help you understand how to manage and grow your business.