For businesses with seasonal operations, maximizing revenue and keeping inventory stocked can be a challenge. Most seasonal businesses are reluctant to take out loans because they place debt on the balance sheet, eat into revenue, and will most likely need to be paid off during the off season. However, there are still debt-free funding options to ensure a successful season for these businesses.
Merchant Cash Advances
Merchant cash advances offer a cash infusion ahead of the sales rush, which is ideal for seasonal businesses making preparations. The added capital can be used for anything from inventory to advertising, hiring additional employees, or anything else a seasonal business needs. There are no fixed payments with a merchant cash advance. Instead, the balance is repaid from a percentage of sales where the customer pays via credit card. This gives seasonal businesses the flexibility they need without the debt and constraints of traditional loans.
Purchase Order Financing
Purchase order financing is a good fit for distributors and manufacturers who face large or unexpected seasonal orders which would otherwise place a strain on finances and regular operations. Purchase order financing is an advance of capital to be used for purchasing materials, supplies, and anything else needed to fill the large client request. Once the order is shipped and the customer pays the invoice, the financing is deducted from the total and the difference is delivered to the business as revenue. In addition to allowing seasonal businesses to handle large orders, purchase order financing gives seasonal businesses the ability to maximize revenue by taking on large accounts that would otherwise go to bigger competitors.
Accounts Receivable Financing
Accounts receivable financing can be used by businesses across all industries. As we enter spring and summer, construction and landscaping companies are gearing up for a heavy work season, and need to maintain a healthy cash flow. Accounts receivable financing, often referred to as factoring, converts invoices to cash within 24 hours, instead of waiting 30 days or longer for clients to make payments. The improved cash flow allows seasonal businesses to make payroll, cover overhead expenses, and accumulate cash reserves for growth.
At Steadfast Funding Partners, we offer a wide range of solutions for seasonal businesses. If you would like to get ready ahead of the sales rush, or help ensure success throughout the season, contact our offices today.