Much of the Western Canadian economy is seasonal. Road builders, landscapers, golf courses, grain handlers, tourism operators and holiday retailers all earn most of their revenue in a few months and spend ahead of it. A bank line set once a year at a fixed limit is the wrong shape for that cycle.
The trap
In the build-up months the business buys inventory, hires crews and carries receivables, and the bank line is maxed. In the peak months cash comes in, the line is repaid, and the bank sees a clean file. At the annual review the limit is set against a balance sheet taken at the wrong moment, and next spring the trap closes again.
What works better
- An asset-based line whose availability rises with receivables and inventory during the build-up
- A seasonal bulge facility: a short-term increase for the pre-season months, repaid at peak
- Equipment term loans with payment schedules matched to the operating season
- Purchase-order financing for large contracts that land before the season starts
Private lenders can structure all four because they lend against current collateral and contracts rather than last year’s statements. The cost is higher than a bank line; the value is a business that can take every job it wins.
Have a situation like this? Tell us about the deal and a principal will respond within two business days. Cascade lends to businesses only, in Canadian dollars, and every rate we quote is an annual rate.
