Gravity Payments

5 Seasonal Business Loans & Funding To Help Your Business During Peak Season

Need financing to maximize your seasonal business income? Check out our breakdown of five seasonal business loans in this handy guide!

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Not every business can expect consistent revenue all 12 months of the year. In fact, many smaller or local businesses are considered seasonal, meaning they earn most or all of their income during a few months. A seasonal business loans is a smart financial resource to help you maximize revenue during the peak season for your industry.

Not sure where to start looking? Today, let’s break down five seasonal business loans to help your business succeed during peak season and beyond.

Why Use a Seasonal Business Loan?

Say you run an ice cream shop downtown. In the summer, business is booming, as the hot weather makes everyone crave a sweet, icy treat. But when winter rolls around, ice cream is the farthest thing from most folks’ minds.

Keeping with our ice cream shop example, you’ll want to purchase as many ice cream ingredients as you can so you generate as much income as possible during your on-season. That way, you can rest assured that you won’t run out of essential ingredients as the demand peaks.

But seasonal businesses can be impacted by the significant reduction in cash flow during “downtime”, that may result in insufficient liquidity to make those necessary purchases. That’s where seasonal business loans come in. These short-term loans can be taken out to help you maximize income during a specific season or two. Then, when business slows down, you use your remaining cash pay back the loan.

Before you begin your season, make sure to use a variety of marketing tactics, like analyzing social media metrics and reviews, to determine when most of your customers will make purchases or come to enjoy your services. Then, get your seasonal business loans sorted so you can start preparing for the season and have everything ready by the time people rush through the front doors.

5 Types of Loans for Seasonal Businesses

Now, let’s look at five types of seasonal business loans your company should take advantage of this year.

1. Working Capital Funding

Working capital, or a “Merchant Cash Advance” is not a loan, but an advance on future earnings meant to help cover a business’s operational needs in the short term. The money is not intended to be used for long-term investments, but rather for short term needs. 

A MCA, or merchant cash advance, provides upfront cash to your business. This cash is to be repaid by deducting 10-20% of credit card sales until the balance has been paid. You can learn more about our working capital offering here, which now offers funding for merchants who don’t currently process payments with Gravity. 

Another option is to go with a business credit card, which ideally should be a card with a 0% APR introductory period and can provide extra working capital for your business – make sure to pay off your balance before the end of this period, as it can lead to inflated interest rates and damage to your credit score. 

A third option is invoice financing, which is where you borrow money against outstanding invoices from customers. The invoices then become collateral. 

2. Equipment Financing Loan

Equipment financing loans can help you cover up to 100% of the cost of upgraded or completely new business equipment. It’s perfect if you need software, specialized machinery, and other devices to help your business thrive and bring in money.

With an equipment financing loan, you can purchase anything your business needs to succeed, including:

  • New wireless payment systems and POS for in-store, online, or on-the-go payments
  • Tables, chairs, and other customer equipment
  • Machines and heavy equipment for your staff members
  • Raw materials, like food ingredients or components for your products, etc.

As with all loans, be sure to read the details of an equipment financing loan before signing up for it to avoid high-interest rates and fees.

3. Seasonal Business Line of Credit

Seasonal business lines of credit are exactly what they sound like – lines of credit that give you a certain amount of money that you can tap into again and again, provided you pay down your balance regularly.

Seasonal lines of credit are useful for seasonal businesses because you can use them for ongoing expenses, like inventory purchases and staff payroll, but also as emergency cash reserves to help you replace equipment, vehicles, or ingredients.

With a seasonal business line of credit, you can purchase what your brand needs to make money during its on-season without having to worry about paying down that line of credit when things slow down. This is also one of the benefits of having a personal loan ready to go in case cash flow dries up unexpectedly.

4. Invoice Factoring

Don’t forget about invoice factoring, which can help if you don’t have strong cash flow during a peak season. If you have to wait several weeks or months to see money from your customers due to your specific payment terms, you can use invoice factoring. 

With invoice factoring, you trade IOUs or recorded invoices for cash. Essentially, you sell pending invoices from your customers to a lender for money upfront. With this model, you’ll usually receive 80% of the invoice amount from the lender you work with. After the lender collects payment from your clients, they’ll provide you with the remaining balances for the sold invoices minus any fees.

Take note that invoice factoring won’t impact your credit as it’s a sale, so it’s a viable option for small businesses that may have less-than-stellar credit or that won’t qualify for a term loan. 

5. Term Loan

Last but not least are term loans, which are set amounts of money you pay off over a strict time frame. These are perfect if you have a lot of big business purchases to make, like renovating your storefront as you scale your business or ordering inventory. You can get these loans from the Small Business Administration for excellent interest rates, typically between 4% and 6%, but you can also pursue them from alternative lenders with higher average APRs, usually around 7% to 50%. The downside is the lengthy and potentially challenging application process. 

RELATED: Working Capital Loans vs Term Loans


The above seasonal business loans and financial tools could be just what your company needs to thrive in its industry. With these loans and lines of credit, you’ll always have enough money to buy products, expand your brand, and attract new customers during the busiest and most profitable time of year.

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