For seasonal small businesses — beach-town cafés, December-heavy retailers, summer-heavy event businesses, school-term-dependent trades — there is typically one or two months a year where revenue dips by 40-80% from the trading average. The slow months are not a surprise. The way each business handles them is what differs.
The three usual approaches
- Save during the strong months. The textbook answer. A retailer who makes 35% of annual revenue in December and 5% each in June-July should set aside enough of December’s takings to cover the slow months. Many do this well; some don’t, and the conversation becomes a financing one.
- Use a revolving credit facility. A revolving line sized to cover one quiet month’s overhead is the natural match. Draw what’s needed during the slow weeks; repay from the next strong month. The Credicorp Flex shape is built for this — interest only on what’s drawn, no fees during inactive months.
- Take a one-time loan ahead of each slow period. A £2,000-£4,000 short-term loan in May, repaid over 60-90 days from the July-August recovery. Less flexible than Flex but predictable in cost.
The discipline that matters
Whatever approach: do the math before the slow month, not during it. The honest version: take your average monthly overhead (rent, utilities, payroll, software, minimum supplier commitments), multiply by 1.2, and that’s the cash you need to have available for each slow month. If your save-during-strong-months pace isn’t getting you there, the gap is what to finance — and at what term.
What we’d argue against
- Financing the slow month at the LAST minute. The loan still happens; the position is just more stressful and the options are narrower. Plan in May for August.
- Sizing the loan for a worst-case slow month every year. The worst-case is rare. Size for the realistic case; have the recovery plan ready for the worst case.
- Treating the loan as the answer to a structural shortfall. If the strong months don’t out-earn the slow months in aggregate, no amount of cashflow financing fixes the underlying business model. The honest read of the previous 12 months’ P&L is the test.
For revolving-facility sizing and the per-drawing math, see setting your Flex limit and inside Credicorp Flex. For a one-time-loan quote against a specific slow-month gap, the calculator handles it.
