Commercial bridging loans provide businesses affected by seasonality with funds to bridge the gaps between seasonal peaks and troughs in revenue.
Seasonality is a challenge faced by businesses in a variety of industries whereby they experience recurring peaks and troughs in income throughout the year.
One of the commonest causes of seasonality is the weather. Many businesses thrive during the warmer summer months and then see a sharp decrease in revenue when the weather is wet and cold.
The weather is by no means the only cause of seasonal dips though. Other factors that could cause seasonal changes in revenue include the economy, university terms, and special celebrations like Christmas, Valentines’ Day, Easter, and Mothers’ Day.
Businesses that are affected by seasonality should take the time to analyse their performance throughout the year and understand when and why these dips and troughs occur. Once they have a good understanding of what is happening and why, they can adjust their budget throughout the year accordingly and make plans to drive sales or push alternative sources of revenue during the dips. This could involve setting up a side-project, running special offers, boosting marketing efforts, and hiring seasonal staff.
Even businesses that have prepared and planned for seasonal dips may find themselves struggling with cash flow during these quieter periods though. This is when a bridging loan may come in handy.
Bridging loans to finance seasonality
Bridging loans offer businesses affected by seasonality a quick way of acquiring the funds they require to tide them over during a seasonal dip.
As well as being useful for keeping the business afloat and paying for unexpected expenses during quieter periods, bridging loans can also be useful for maximising profits during peak periods.
Businesses that experience significant increases in demand at certain times of the year will need to inject large amounts of money into buying stock and hiring staff before they enter their busy periods. A bridging loan allows them to acquire more inventory and cover greater expenses to further increase sales during these seasonal peaks.
At Richmond Asset Finance we provide flexible commercial bridging loansto help with your business’ immediate financial requirements during seasonal peaks and troughs. To find out more about our bridging loans, give our team of experts a call on 0113 288 3277.