With the arrival of the holiday season, you probably expect your business sales to grow.
Prepare for increased demand when you choose the right financing option for your business. It meets your unique needs, supports your company's overall financial health and helps grow revenue.
Know Your Financial Needs
List all the financial needs you will have this holiday season so you can estimate how much cash you really need.
- Hire seasonal help.
- Increase inventory.
- Release a new product.
- Implement a new marketing campaign.
- Open a temporary retail location.
- Makeover your website.
- Offer free shipping.
Check Your Business Credit Score
A strong business credit score increases your likelihood of gaining credit from lenders and vendors.
Check your business credit with major bureaus and, if your score is low, ask vendors and suppliers to report your payments so you can build creditworthiness.
Open a Business Line of Credit
For seasonal or emergency expenses, open a business line of credit with your financial institution to give yourself flexible access to funds only when you need them.
The most economical lines of credit don’t charge monthly fees.
Ask Vendors to Extend Trade Terms
Your vendors and suppliers may be willing to grant extra time to pay invoices, such as 30, 60 or 90 days.
Using extended trade terms can free up cash to cover urgent holiday bills if you have a track record of paying on time.
Utilize Your Business Credit Card
With a business credit card you can delay payment on purchases; you only pay interest on carried balances.
Track spending carefully so you can repay balances promptly and avoid fees.
Finance Your Inventory
Obtain a short-term loan secured by the inventory you purchase to meet seasonal demand.
Interest rates and fees can be higher for inventory financing, and some loans include penalties for early repayment.
Carefully Examine Options if you Have Poor Credit
If your credit is poor, traditional financing may be unavailable and alternative options often carry higher fees and rates.
Read the fine print and weigh whether a cash advance or non-traditional financing is appropriate for your business.
If you run a small storefront, consider reviewing related coverage such as Small Mercantile Packages to protect seasonal operations.
If you plan seasonal events or temporary retail locations, also review options for event and storefront protection like Holiday Festivals Insurance.
If you're unsure which financing option fits your business, talk to your agent.
Successfully navigate the holiday season by weighing financing options that give your business capital while maintaining financial health into the new year.
Frequently Asked Questions
How do I estimate how much holiday financing I need?
List all expected seasonal expenses—staffing, inventory, marketing, shipping and temporary locations—then add a cushion for unexpected costs.
When is a line of credit better than a credit card?
A line of credit often offers lower interest and greater flexibility for ongoing or unpredictable seasonal needs, while cards are convenient for short-term purchases.
Can building vendor payment history improve my business credit?
Yes, asking vendors to report timely payments to business credit bureaus can help improve your credit profile over time.