The silly season is fast approaching, so people will be preparing for this wonderful time of the year. It is a period when families come together to celebrate Christmas and New Year and, let’s not forget, take a much needed summer holiday.However, if you own a business, this period may have an impact on your operation for a number of reasons meaning that it requires some additional financial support to help it through the few weeks of the silly season.
For instance, the sort of business you have is one reason why you may need to borrow more money. If your business is involved in the retail trade then the silly season is possibly going to be its busiest time of the year whereas if you own a factory then you may be closing your operation for a week or two to give your employees a much needed holiday. We will explain why these two scenarios may require you to apply for the likes of a small business loan shortly.
Just as individuals and families prepare for the silly season in advance by doing things like buying gifts and additional food, you should plan ahead when it comes to running your business. For instance, if you have prepared and monitored a cash flow forecast, you will know if your business is going to require financial support as the end of year approaches. If it does then better to have applied for say a business loan before the silly season is upon you and have the funds in your business transaction account to be able to utilise.
Now, let’s look at a number of scenarios why a business may require short term finance:
Buying additional inventory
If you own a store selling things like clothing, shoes, watches, jewellery, perfume, food and drink then your business is probably going to be busier leading up to Christmas than at any other time of the year. Therefore, it makes sense to ensure that you have an adequate level of inventory to sell to your customers. The more you sell, the higher your business’s profit and the greater income you take home to spend.
If you own a restaurant and are hosting Christmas parties, then you will need to order more food and drink from your suppliers. This will require cash flow to cover these costs.
So, you may find a short term business loan of benefit as this would enable you to increase inventory levels prior to the silly season starting. This will help you meet the increased demand of your customers. If you sort out your inventory requirements in advance you may even be able to negotiate more advantageous terms with your suppliers thus increasing your profit margin.
Closing down for Christmas and the New Year
Many businesses decide to close down for a week or two during the silly season to give their staff a break to enjoy with their families. During this period, the turnover of your business may fall but your employees will still need to be paid. If you are a generous employer, you may also wish to pay them a Christmas bonus and meet the cost of a staff Christmas party to be enjoyed by all.
Ideally, you will be able to meet this expenditure from working capital but if not you could consider applying for additional finance such as a working capital loan.
If you are in the hospitality trade running the likes of a hotel, café, restaurant, bar or own a takeaway store then you are no doubt going to be busier during the silly season than at other times of the year. You will be holding office parties and families will be eating out more. Post Christmas shopping will more than likely lead to more Uber Eats. As a result, you may need to take on temporary staff to deal with the increased volume of business and they need to be paid.
If you own a store then you may need to take on temporary staff to serve the extra customers expected to walk through your business’s door.
Hopefully you will be able to meet this additional expense from cash flow but if not you could consider applying for a short term business loan.
How to finance the silly season
It would be preferable if your business had sufficient monies to fund this period without resorting to borrowing money but if not there are a number of options including things like a business overdraft facility, line of credit, working capital loan or short term business loan.
You will be pleased to read that, here at ALC Commercial, we are able to assist small and medium sized businesses obtain the likes of a short term business loan easily and quickly. Even if you or your business has a poor credit history, we may be able to help. Just apply online and one of our loan specialists will be in contact with you to discuss your requirements in more detail with a view to hopefully finding the most appropriate lending product. If approved, a business lending offer will be sent to you and, sometimes within 24 hours of you accepting the offer, the funds will be in your nominated bank account to help you fund the silly season.