How should a seasonal business use a line of credit?

Used correctly, a seasonal line is drawn down in the off-season and repaid to zero during the season, every year, on a cycle you could mark on a calendar. Lenders expect exactly that pattern, and many seasonal lines carry an annual clean-up requirement: a set number of consecutive days, often 30 to 60, at a zero balance.

Size it against the trough, not the year. Add up fixed costs from October through April — rent, insurance, core payroll, debt service — subtract the off-season revenue you can genuinely rely on, and that gap plus a 20% cushion is the line you actually need. A marina earning most of its revenue in five months usually needs a line worth two to four months of operating cost, not a year of it.

The failure mode is treating the line as permanent capital. If the balance never returns to zero, the line is quietly funding losses rather than timing, the clean-up covenant gets breached, and you risk the renewal conversation going badly at the exact moment you need the money. If you cannot reach zero in a good season, the problem is not the line.

A Business Line of Credit is the right instrument, and SBA CAPLines exist specifically for seasonal and contract working capital when a bank line comes up short. Call the desk in the winter — a seasonal line underwritten in March against last season's numbers is a far easier file than the same request made in July.