Many seasonal businesses struggle with cash flow during their slow months. A merchant cash advance (MCA) can help bridge the gap—if used wisely. Here’s what you need to know.

What Is a Seasonal Gap?

Seasonal gaps occur when your business earns most of its revenue during certain months, but expenses like rent, payroll, and insurance continue year-round.

• Landscaping businesses slow down in winter
• Tax preparers get quiet after April
• Holiday retailers make most sales in November and December

How MCAs Help Seasonal Businesses

• Payments match sales: When revenue slows, daily payments decrease automatically
• Fast access to cash: Funds can arrive in just days
• No fixed payments: Unlike loans, MCA payments fluctuate with your income

When Does an MCA Make Sense?

• You have a consistent sales history and know your busy season is coming
• Your seasonal gap lasts a few months—not all year
• You need to keep staff and operations running during the downtime

Real-World Examples

• Landscaping Company: Uses an MCA in winter to cover payroll; repays during spring boom
• Beach Resort: Renovates in February using MCA funds; repays from summer revenue
• Accounting Firm: Maintains staff in the off-season with MCA, repaid during tax season

Costs and Risks

MCAs can be expensive. They only make sense if:

• Your busy season will reliably cover the cost
• You can’t access cheaper financing
• The cost is lower than potential losses from cutting staff or closing temporarily

Red flags: Relying on MCAs every year, using them to pay off other debt, or borrowing without a clear repayment plan.

Better Alternatives

• Business line of credit: Lower cost, flexible borrowing
• Seasonal business loan: Tailored for seasonal cycles
• Invoice factoring: Get paid faster for completed work
• Cash reserves: Save from peak seasons to cover slower ones

Making It Work

• Apply during your strong months for better terms
• Borrow only what you need
• Create a payback plan based on projected seasonal revenue
• Use MCAs as a bridge, not a long-term crutch

Short-Term Funding for Off-Season Survival

MCAs aren’t the only short-term funding option. Consider:

Choose a line of credit if:

• You have good credit
• You want the lowest interest cost
• You need flexibility

Choose an MCA if:

• You need funds fast
• Your credit isn’t great
• You want sales-based payments

Choose invoice factoring if:

• You’re waiting on customer payments
• You have reliable commercial clients

Choose equipment financing if:

• You need to buy or repair equipment
• The equipment will help increase seasonal revenue

Final Tips

• Apply before you’re desperate—during your strong season
• Borrow just enough to bridge the gap
• Use the money to retain staff, prep inventory, or upgrade equipment

The Bottom Line

MCAs can be a lifeline for seasonal businesses—but only when used strategically. Know your numbers, have a clear payback plan, and avoid using them as a recurring solution. Build cash reserves during strong months so that you don’t rely on short-term funding every year.

Need seasonal funding fast? Contact Swish Funding today for fast, flexible support tailored to your business needs.