A seasonal business knows roughly when it will be short and roughly by how much. That foreknowledge is worth a great deal, and it is routinely wasted by treating the trough as a surprise every year.
Last reviewed 8 September 2026
Indicative interest cost
Weekly
$113/week
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
Sending to Prospa
$45,000 drawn at 13.00% . Prospa will ask a few quick questions, then provide a firm quote and funding if eligible.
Redirecting…
The short version
The shape of the year
A seasonal year has four parts rather than two. There is the peak, when everything works. There is the shoulder afterwards, when revenue falls faster than costs do. There is the trough, when fixed costs run against very little income. And there is the pre-season build, when stock is bought and staff are hired before a dollar has come in.
The trough is the part everyone plans for and the pre-season build is the part that catches businesses out. It arrives at the end of the leanest stretch and requires the largest single outlay of the year, which is why the tightest week is frequently the one just before trading picks up.
Sizing the requirement means covering both. A facility built to survive the quiet months and exhausted by the time stock has to be bought has funded the wrong half of the problem.
Peak months
Revenue and cash
Shoulder
Costs continuing
Trough
Fixed costs only
Pre-season
Stock and hiring
Worked example
An operator takes roughly 70% of its annual revenue in five months. Fixed costs run at about $28,000 a month year-round, covering premises, core staff, insurance, compliance and vehicle finance.
Across the four quietest months revenue averages $11,000 against those costs, so the shortfall accumulates at around $17,000 a month, or $68,000 across the trough. Then the pre-season build adds roughly $25,000 of stock, marketing and recruitment before the first booking is paid.
The peak requirement is therefore in the order of $93,000, and it arrives in the week before trading resumes rather than in the depth of winter. A facility sized at $70,000 would have looked adequate on the trough analysis alone and would have run out at exactly the wrong moment.
Illustrative figures
Illustrative on stated assumptions and rounded. Not a quote or offer of credit.
Which facility fits
The requirement is a limit available for part of the year rather than a lump sum needed all of it, and that distinction decides most of the choice.
| Feature | Revolving facility | Term loan | Merchant cash advance |
|---|---|---|---|
| Cost when unused | Little or none | Full interest regardless | Not applicable |
| Repays through the peak | Yes, at the business’s discretion | On a fixed schedule | Automatically, from takings |
| Available again next year | Yes | No | By reapplying |
| Repayment falls in a quiet month | Only if drawn | No, it is fixed | Yes, it follows takings |
| Suits card-heavy trading | Either way | Either way | Specifically |
For most seasonal businesses a revolving facility is the natural shape. Where takings are almost entirely on cards and the season is short, an advance repaid from those takings can suit the rhythm better despite the higher cost.
The timing that costs money
A lender looking at three months of bank statements in August sees a business at its weakest, because that is what the statements show. The same business assessed in March presents twelve months including a strong peak. Nothing about the business has changed and the terms available are materially different. Arranging a seasonal facility during the peak, for use in the following trough, is the single most valuable timing decision in this whole page and it costs nothing but planning.
Flattening the year
Each reduces how much facility is needed. Several are commercial rather than financial, and they compound year on year.
01
Work that fills the quiet months, even at lower margin, changes the shape of the year more than any facility does. A tourism operator taking corporate work in winter is doing the same thing as a builder taking maintenance contracts.
02
Seasonal staffing, equipment hired rather than owned, and premises sized to the average rather than the peak all reduce what has to be carried through the trough.
03
Taking deposits at booking rather than payment at delivery moves cash into the period it is needed. In tourism and events this is ordinary rather than exceptional.
04
A supplier that ships pre-season stock on extended terms is funding part of the build directly, which is cheaper than any facility and frequently available on request.
Funding a season
The honest test
A seasonal business is viable when the peak generates enough to cover the whole year including the trough. Where it does, funding the dip is a timing exercise and the facility is repaid every year out of the following peak. That is a stable, fundable pattern and lenders understand it well.
Where the peak does not carry the year, funding the trough borrows from a peak that will not cover it, and the position deteriorates annually. Each year begins with a little more debt and the same seasonal shape, and the facility that looked like a solution is the mechanism by which the decline is financed.
The test is a full-year view rather than a monthly one: total revenue against total cost including the funding, across twelve months. It is a straightforward calculation and it is the one that decides whether the answer is a facility or a change to the business.
Building the forecast
01
Twelve months of closing balances, month by month, on a single line. It takes an hour and it produces the shape of the year more honestly than any forecast built forward from assumptions. The trough is visible, its depth is measurable and its length is countable.
02
A new lease, extra staff, a price rise, a contract won or lost. Last year is the base rather than the answer, and the adjustments are usually few enough to list on one page. A business that cannot name what changed is ordinarily fine using last year unadjusted.
03
Stock, marketing and recruitment before trading resumes, sized from what was actually spent last year. This is the step most often missed, and it is the one that determines whether the facility is large enough at the point it matters most.
Through the trough
A seasonal facility is drawn down over months rather than at once, which makes it easy to lose track of. Checking the drawn balance against the forecast monthly rather than at the end of the season is what turns a shortfall into an adjustment rather than a crisis, because a variance spotted in month two can be managed and the same variance found in month four cannot.
The variance worth watching most closely is the timing of the recovery rather than the depth of the trough. A season that starts two weeks late extends the funded period at its most expensive point, and it is visible in bookings or forward orders well before it shows in the bank account.
Repaying deliberately through the peak matters as much as drawing carefully through the trough. A facility that clears each year is behaving as intended and reads well to a funder at review, and a balance that never returns to zero is telling the business something about the year that is worth acting on.
The cost of the trough
A revolving facility charges on what is drawn, so this shows the interest cost of an average drawn balance across a year rather than a repayment. Indicative only, and not a quote or offer of credit.
Indicative interest cost
Weekly
$113/week
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
Sending to Prospa
$45,000 drawn at 13.00% . Prospa will ask a few quick questions, then provide a firm quote and funding if eligible.
Redirecting…
References
Context for the seasonal patterns in New Zealand tourism, retail and construction activity.
Context for sector activity data underlying the seasonal shapes described here.
Relevant because tax instalment dates rarely align with a seasonal trading pattern.
Backs the description of seasonal staffing as a way of varying the cost base.
Backs the distinction between general information of this kind and regulated financial advice.
FAQ
From last year’s bank statements. The accumulated shortfall across the quiet months plus the pre-season build gives the peak requirement, and that peak is ordinarily higher than the trough analysis alone suggests.
During the peak, for use in the following trough. A lender assessing a seasonal business in its quiet months sees it at its weakest, and the terms available differ materially from those offered on the same business three months earlier.
Because it requires the largest outlay of the year at the end of the leanest stretch, before any revenue has resumed. A facility sized only to survive the quiet months runs out exactly then.
Ordinarily a revolving one, because the requirement is a limit available for part of the year rather than a lump sum needed all of it. A term loan charges for money that is not needed through the peak.
It can be where takings are almost entirely on cards, because repayment falls automatically in a quiet week. It costs more per dollar than a revolving facility, and the self-adjusting repayment is what is being paid for.
A facility sized on last year and used against a longer season runs out. Building tolerance into the sizing, and reviewing the position monthly against the forecast rather than at the end, is what turns that into a manageable adjustment.
Frequently, and it is worth more than funding. Counter-seasonal work, a more variable cost base, deposits taken at booking and supplier terms across the pre-season build all reduce the requirement permanently rather than for one year.
Ordinarily yes, particularly those lending into tourism, horticulture and construction. Presenting twelve months rather than three, with the pattern explained, is what allows a lender to assess the year rather than the month.
Then funding the trough borrows against a peak that will not repay it, and the position worsens annually. That is a business question rather than a funding one, and a full-year calculation is what surfaces it.
Ideally yes. A revolving facility that returns to zero through each peak is behaving as intended. A balance that never clears is telling the business that the annual cycle is not repaying it, which is worth acting on early.
Materially, in sectors where it is accepted. Moving cash from delivery to booking shifts it into the period where it is needed, and in tourism and events it is ordinary practice rather than an unusual request.
No. It describes a situation and the instruments that address it in general terms. This site is not a lender, a broker or a registered financial adviser, and what suits a particular business depends on facts a website cannot see.
Related
Merchant cash advance
Where repayment falling in a quiet week is worth the premium.
Read onWorking capital loan
The term option, and why it fits a season poorly.
Read onBuying stock
The pre-season build, in its own right.
Read onThe working capital cycle
Measuring the year rather than estimating it.
Read onAll eight products
Every facility compared in the same shape.
Read onDisclaimer
A working capital facility is a commitment serviced out of the same operating cash flow as everything else, and the fees recur for as long as it is used. Modelling the weekly cost against the trading position before committing is what this site is built for. Borrowing at a level that stays comfortable through a quiet quarter, rather than only through a strong one, is widely regarded as the safer frame.
What this site is
A calculator and information tool. Not a lender, not a broker, not a registered financial adviser. Nothing here is personalised financial advice.
What the figures show
Modelled estimates based on the inputs shown. Not a quote. Not an offer of credit. Not a guarantee of approval, rate or fees.
What the lender decides
Final rates, fees, and approval are set by the lender after a CCCFA-appropriate assessment of the applicant's circumstances and credit decision.
Commercial disclosure
Workingcapital.org.nz earns a commission from Prospa when a visitor applies through this site and their application is approved. The commission is paid by Prospa, not by the borrower, and it does not influence the rate Prospa offers. Full disclosure on the partner page.
Tax, GST, and accountant framing
Tax-treatment statements (GST claim timing, interest deductibility, depreciation rates) are general in nature and subject to the accountant's confirmation on the specific business position. For material amounts, professional advice from a registered financial adviser or chartered accountant is widely regarded as the safer frame.
