Guide · Buying, expanding, opening
Your store does 40 percent of the year in November and December and the stock is ordered in September. What funds it?
By Alex Makowski Published
A working capital loan or a card-settlement advance sized to the fall orders, applied for in August or early September against summer deposits, funded in one to three business days and repaid across November and December. Send last year's fourth quarter with the statements so the underwriter sees the season. A store with two years of clean statements should be setting up a line of credit in spring for exactly this.
In this guide
- 01The retail calendar and the cash it needs
- 02Why August money is cheaper than October money
- 03Which product
- 04Every year, so set up the line
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01
The retail calendar and the cash it needs
A gift shop, a toy store, a boutique or a sporting goods store that does a large share of its year in the last two months buys that inventory in August through October, on supplier terms that are shorter than the time it takes to sell through. The store is at its most stocked and its least liquid in October, three weeks before the sales that repay it. That is not a failing; it is the model, and every seasonal retailer runs into it.
02
Why August money is cheaper than October money
A funder reads the last three to six months of deposits. In August, that is May through July — a normal or strong stretch for most stores. In October it is July through September, when the store has been spending on stock and, for many categories, selling less. Same store, smaller offer, worse price. Apply before the buying, hold the money for six weeks, and the interest on money you did not need yet is far cheaper than the smaller offer.
Send last year's November and December alongside. A funder that can see the season repeat is pricing a season; one that cannot is pricing a slow quarter.
What your deposits support
03
Which product
A working capital loan for a fixed amount, repaid weekly across the season, is the simplest. A card-settlement advance with a true holdback — repayment as a percentage of card sales — fits a store whose December is three times its June, because the repayment is heaviest exactly when the sales are. Ask for the holdback by name and read the reconciliation clause; most advances are fixed debits by default.
Amounts run half to one and a half times a month's deposits, and which month counts as typical is what the full-year statements decide. Borrow the purchase orders, not a round number.
04
Every year, so set up the line
A business line of credit applied for in spring, against the previous holiday's statements, is drawn in September and repaid from December's sales, costing nothing from January to August. It is the product a seasonal store should be working toward, and it takes two years of clean statements and a few weeks to set up — which is why it is a March task.
Written by
Alex Makowski, Owner
Alex Makowski owns and runs Business Loans for America and has been placing funding for U.S. small businesses since 2021. Businesses he has worked with have secured $50M+ in financing across 1,200+ placements. He writes and reviews every guide on this site.
FAQ
Related questions.
- Can I get supplier terms instead of a loan?
- Ask every vendor for extended holiday terms — net-60 or dating programs that push payment to December are common in gift and toy categories for accounts with a history. Every vendor that agrees shrinks what you borrow.
- Does a bad holiday season show up next year?
- Yes, in the statements a funder reads next August. Send the whole year and, if the season was weak for a reason, say the reason. A single weak season with an explanation is priced differently from a trend.
- Should I fund fixtures and displays the same way?
- Fixtures, shelving and a new POS are equipment and finance over years at a lower cost. Keep them off the inventory advance; two applications, two days apart.
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Sources
- U.S. Small Business Administration — LoansFederal loan programmes, eligibility and what the SBA does and does not guarantee.
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