Why the fourth quarter strains cash
For many product businesses, the holiday season brings a large share of annual sales, but the inventory for it is paid for months earlier. Production, freight and warehouse receiving all take time, and online sellers often face warehouse check-in cutoffs well before peak shopping days. Cash leaves in summer; it comes back in December and January.
Returns add a final twist. Many holiday sales come back in January, so net revenue lands lower and later than gross sales suggest.
Build a holiday cash timeline
Map the season from order to final payment. List when deposits and balances are due, when goods ship and arrive, when selling starts and peaks, when marketplace payouts land, and when returns hit. Then place funding payments on the same calendar. The goal is payments that are small before the peak and covered by holiday sales.
- Supplier deposit and balance due dates
- Production and freight lead times
- Warehouse or store receiving dates
- Selling start, peak weeks and final ship dates
- Payout timing for online sales
- Return window after the holidays
Which funding options fit holiday stock
A business line of credit fits businesses that buy for the holidays every year and want to draw in stages as orders come due. Short-term working capital fits a single large holiday order. Revenue-based financing fits sellers whose revenue before the peak is thin, since payments ease until holiday sales arrive. Compare total cost for each.
- Business line of credit: staged holiday orders year after year
- Short-term working capital: one large holiday order
- Revenue-based financing: payments that rise with holiday sales
Sizing holiday orders
Use last year's holiday sell-through as the anchor, adjusted for real trends in your own sales this year. Separate core products that sell every year from trend items that might not. Fund the core confidently, take smaller positions on trend items, and know which suppliers can reorder quickly. Unsold holiday goods usually need deep markdowns in January.
- Core holiday sellers: fund with confidence based on history
- Trend or new items: smaller orders, test early
- Gift sets and seasonal packaging: little value after the holidays
- Reorderable basics: keep credit ready for mid-season restocks
Online sellers: warehouse cutoffs and payouts
Online sellers using fulfillment warehouses often face inbound deadlines well before peak shopping days, and late arrivals can miss the season entirely. Plan production and freight backward from those dates. Many funding partners typically review marketplace payouts as revenue, though treatment varies by funder, so route payouts to a business bank account.
See the e-commerce sellers page for more on marketplace revenue and returns.
Repayment through January
Choose terms that extend past December so holiday sales and post-holiday returns are accounted for before the final payments. If payments end in November, you may be paying for inventory before it sells. After the season, review what worked: sell-through, markdowns and funding cost, and use it to plan next year.
If payments feel tight in a slow January, contact your funding partner early to ask about options to lower your payment or stretch the term.
Apply early
Holiday funding is easiest to arrange before suppliers and freight carriers are at capacity. Apply when you have supplier quotes, not when balances are due. Many funders typically review recent statements, so a full year that shows last holiday season helps a reviewer understand your pattern. Requirements vary by product and funder.
See the pre-season inventory buying guide and how long funding takes.
Frequently asked questions
When should I order holiday inventory?
It depends on your products and suppliers, but many businesses order in summer and early fall, and earlier for imported or custom goods. Work backward from your selling start date through freight, production and supplier order deadlines, and confirm those dates with suppliers.
How do holiday returns affect repayment?
Returns lower net revenue and often arrive in January, after the sales that triggered them. Plan repayment assuming returns similar to last year, and avoid structures whose largest payments land right when refunds are going out. Check last year's return rate before sizing orders.
Can online sellers use marketplace payouts to qualify?
Often, yes. Many funding partners typically review marketplace and payment processor payouts as business revenue, though treatment varies by funder. Keeping payouts in a dedicated business bank account makes them easier to verify, and a full year of statements shows last holiday season alongside slower months.
What if holiday sales come in below plan?
Funding payments continue on schedule, so plan a slower case before ordering. If sales disappoint, reduce reorders, move excess stock through promotions or other channels, and talk to your funding partner early if payments become difficult. Review what happened before placing next season's orders.
Planning your holiday buy?
Apply online with your supplier quotes so our funding partners can review options before deadlines.
Updated September 14, 2026 · Prime Funding Now Funding Team