Guide

How do funders read a seasonal business?

Across a full year rather than a recent quarter — but only if you give them the full year. Six months sampled at the wrong point shows a business in decline rather than one in its off-season. Submit twelve months, apply on the back of your strong months, and ask for repayment that flexes with deposits.

Why six months of statements can work against you

Most applications ask for six months. For a landscaper, a gym or a seaside restaurant, six months can be almost entirely the quiet half of the year.

An underwriter reading that sees falling revenue, because nothing in the file explains the shape. The decline or the reduced offer is a reasonable response to incomplete information.

Submitting twelve months voluntarily is the single most effective thing a seasonal business can do. It costs nothing and it changes what the file says.

Timing the application

Underwriting weights recent months. Applying at the top of your season produces a materially better offer than applying at the bottom of it.

Which means the money should be arranged before it is needed — a landscaper funding spring equipment applies in autumn or early spring, not in the February when the account is emptiest.

If you must apply in the trough, say so explicitly and provide the prior year for comparison. Underwriters accept a documented seasonal pattern; what they cannot accept is unexplained volatility.

Structuring it so the off-season survives it

Ask for repayment as a share of deposits, or for weekly rather than daily debits. A fixed daily amount set against July revenue is the payment that closes a business in January.

Check the reconciliation clause specifically, and ask directly what happens to the debit during your known off-season. Get the answer before signing.

Size the facility against your worst month, not your average. If the payment does not clear in the quietest week of the year, the facility is too large whatever the offer says.

Sources

Related questions.

Which industries does this affect most?
Landscaping, restaurants with tourist trade, retail weighted to the holidays, gyms with a January cycle, and anything tied to weather or school terms.
Will a funder accept a seasonal explanation?
Generally yes, if it is evidenced. A full year of statements showing the same shape last year is what makes it credible; an assertion on its own does not.
Is a line of credit better for a seasonal business?
Often, because you draw in the trough and repay through the season. It is also the hardest of the products to qualify for, so it is worth arranging in a good year rather than a bad one.

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