Do you have a seasonal business? This data interests you: Forbes Magazine in 2018 published an article denying the myth that seasonal companies do not survive for long. In fact, data from the Small Business Association (SBA) indicated that seasonal businesses, which are characterized by high and low sales periods, managed to grow thanks to a commercial loan and found ways to diversify their income. These seasonal businesses also managed to take measures to increase cash flow and not suffer cash shortages during the rest of the year.
12 Ways to use a commercial loan to invest in your seasonal business
Those companies that experience cyclical sales during the year can avail themselves of a commercial loan that will provide them with income with which to pay regular expenses and that serve as working capital.
- A commercial loan can help you keep your cash flow stable: When you’re looking for solutions to your typical cash flow problems, you should keep in mind that there are two types of seasonal business. First of all we have those businesses that only open during the high season, such as an ice cream truck located in a coastal city or a ski school academy that only operates in winter. The second type of seasonal business, although open all year, only experiences a peak of activity during the high season. Here are some examples: an accounting firm that has more work during the tax season, a restaurant on the waterfront or a sporting goods store specializing in swimming and diving equipment. Regardless of the type of industry, these companies experience greater cash flows in one part of the year and lower cash flows in other occasions. Applying for a commercial loan at the beginning of the high season and returning it at the end is a very useful strategy for this type of business. Your goal in obtaining the loan is to have a constant supply of cash flow during abnormally high or low seasons.
- A commercial loan can help you prepare for the highest volume of customers and sales during the high season: For example, food trucks, golf or swimming clubs, or souvenir shops are busier during the summer months, that attract a constant influx of customers. These companies need more money to compensate for the rising costs and to continue providing the same quality of products and services as during the rest of the year.
- A commercial loan can help you stock up on inventory: Your inventory varies throughout the year, and you will need to have more inventory during the high season. A commercial loan can provide you with the necessary funds to keep your inventory levels constant during the high season, as well as in the coming months.
- A commercial loan can help you pay your employees throughout the year : If you hire a full-time manager or staff in your customer service department, you will need funds to pay them all year. A commercial loan can help you cover your payroll during the slowest periods.
A commercial loan can help you hire seasonal employees:
- Sales are usually higher during peak seasons and specific days such as Black Friday, Christmas and other holidays. On those dates you need to make sure you have enough staff to serve your customers. You can therefore get a commercial loan to hire extra staff during the high season . Do you need to refresh your human resources skills? Read this article how to hire employees to find the best staff and comply with the law.
- A commercial loan can help you make improvements and remodeling during the low season: With the funds of a commercial loan you will have enough money to, for example, upgrade your gym equipment or buy more tools for your landscaping business. Do you close during winter? It is the perfect time to renew your space or the facade of your store. When you open the doors again at the beginning of the high season, your customers will undoubtedly be attracted to the new look of your business.
- A commercial loan can help you invest in marketing campaigns. You should know how to attract new customers even before the high season arrives. You can hire the services of a marketing company or invest in digital marketing to optimize your website, develop a social media marketing strategy or create content that talks about your product or service. It is also advisable to conduct marketing campaigns during slow seasons to prevent sales from falling too much.
- A commercial loan can help you invest in technology. Technology changes rapidly; That’s why you need to invest in software updates that keep your business up to date. The point of sales (POS) and customer management (CRM) systems are especially useful for seasonal companies that expect high volume of customers in the high season. An intranet system may also interest you because it allows your employees to connect to your company’s network wherever they are.
- A commercial loan can help you with general expenses: Expenses such as public services (water and electricity), rent, Internet, insurance, etc., are normally paid each month. A commercial loan will guarantee that you have sufficient funds to make these payments always on time.
- A commercial loan can help you pay or renew permits and licenses: Your company cannot operate legally unless you pay for the commercial permits and licenses that apply. You can use commercial loan funds to cover these expenses without jeopardizing the future of your business.
- A commercial loan can help you generate income during your low season: You can use the funds from a commercial loan to continue to meet the demand for products and services during the low season even if it is less, so you can continue to have new income. With the loan funds you can even diversify your services by going beyond those that are typical of summer. Do you remember that above we mentioned an ice cream truck? How about turning it into a food truck that offers hot coffee and freshly made donuts when the summer season ends?
- A commercial loan can help you with unexpected expenses . You must be properly prepared for the unexpected. After a whole winter without being used, has your equipment oxidized? Has a tropical storm caused damage to your facilities? A commercial loan can help you in similar circumstances.
Carylas Financial business loans: the help your seasonal business needs
Carylas Financial offers commercial loans that fit your needs and goals. As a seasonal business owner, you may be interested in short-term loans, as you can pay them in a shorter period of time. You can pay your loan in 24 months or pay it in full early if you wish, and with no prepayment. If you request a microcredit, you can receive the funds in a period of only 2 to 4 days, and if you request a commercial loan, you must wait a maximum of 10 days. Other attractive features are fixed monthly payments, the freedom to use funds with very few restrictions and a convenient and easy application process. Complete this simple online application to begin the process and receive personalized assistance from a business loan specialist who will help you find the best financing option for your seasonal business.
You can keep your seasonal business with a commercial loan
If your company lacks funds, a commercial loan will provide you with capital when you need it most. Even if you close your doors during the low season, you will most likely have ongoing expenses for the rest of the year. Therefore, a loan will sustain your business when you don’t have a steady stream of income. Remember that it is a good strategy to apply for a commercial loan before the high season begins, or as we discussed above, to cover payroll and other expenses during the rest of the year. You will guarantee business success regardless of the season you are in, since you will always have the necessary funds.