Strategies for Bridging the Holiday Cash Gap

Jackson Little
July 6th, 2016

Many business owners find themselves low on both inventory and cash at the end of the year, which happens to coincide with the busiest retail season. Increased demand around the Holidays creates an excellent sales opportunity, but it can also leave retailers in a tight spot with low inventory. Other businesses require hiring seasonal employees, which can put stress on your payroll.


How to address seasonal inventory will ultimately depend on your individual business pain points, but there are some general pointers that can help you determine a plan.

Begin by Checking Your Books

Before you start pursuing external solutions,evaluate the state of your finances and conduct a complete inventory. This helps you determine which parts of your business need funds most critically and identify the inventory you need to re-stock. If you eventually seek financing,you will already be organized and ready for the application process.

Typically, small business owners are acutely aware of where their operation needs extra cash, but reviewing your financials enables you to know exactly where you stand with payments, sales, and payroll.

Find the Best Financing Plan for Your Needs

There is an array of solutions geared toward financing small businesses, and unsurprisingly the right tool will depend on your goals. A retailer looking to purchase a franchise, for example, will probably follow a different plan than a contractor seeking equipment financing. A wholesale retailer might use a merchant cash advance as a successful solution for cash, particularly if sales volume is robust at the end of the year.


Seasonal business needs, like restocking popular inventory or hiring additional help, require immediate solutions, but most traditional bank loans don't guarantee a fast turnaround. In these cases,a short-term bridge or merchant cash advance can connect business owners with the capital they need to power through the holidays.


A cash advance, which is sometimes mistaken for a payday loan, is a way for individuals to borrow cash against their credit limit, or for merchants to borrow cash against future receivables. The advance is paid back based on the predetermined purchase amount, typically in a relatively short amount of time. So, if you're confident in sales over the holidays, but need capital, a merchant cash advance can enable you to make the most of the opportunity.

Pick a Partner You Trust

A number of financial institutions and funders offer individuals and small businesses the ability to access cash quickly by taking out a cash advance, typically borrowed against existing future receivables. As a peer leader in this sector, Kalamata Capital is determined to provide fast financing, transparency, andfair rates to small business owners who need access to cash.


For longer-term cash needs, the SBA is a robust resource for useful information, financing plans, and loan opportunities. Opening a line of credit through a bank or third-party lender is another possibility for business owners who are confident in their credit stability but need access to cash. These are just some of the possibilities and learning more about your first step to picking the right strategy to span the end of the year cash gap.

If You Have Them, Seek Investors' Help

Active investors are often willing to contribute or redesignate funds to pay employees or address critical repairs.If your company needs are immediate and essential to operating, willing investors might help you find the best way to cover the end of year costs.

Plan Your Next Holiday Sales Season Now

Turn this year's pain points into next year's breakthrough. If December is the busiest month for sales, it might not seem like the time to step back and take stock--but you should. Keeping track of your stock and sales throughout this high-volume season will help you fine-tune inventory for next year.

Looking Ahead: Protect Yourself in 2020

Before you take out any kind of loan or advance, a financial self-diagnostic is a key to understanding how to move forward with confidence. If you don't think your sales over the holidays will cover the cost of taking out a loan, it's best to try pursuing a solution internally before taking a financial risk.

End on a Strong Note

Staying ahead of business during the holiday season is a challenge, but the right financial strategy will help you navigate through the end of the year and start 2020 on the right foot. When searching for the optimal approach to securing cash for your business, it pays off to do your homework, get yourself organized, and work with an institution you trust.Finding the cash, you need to cover holiday costs is a challenge, but your hard work will set you up for success in the new year.

Jackson Little

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