How do I explain an online store’s seasonal inventory loan needs to a lender?

Lenders approve what they can follow. Begin with a month-by-month view of sales across a full cycle, marking the peak and the slow stretches. Beside it, show when you must pay suppliers, how long stock sits before it sells, and when customers’ payments reach your account. The gap between paying for stock and being paid is what you are asking the lender to cover.

Then give the lender evidence. Include past sales, supplier invoices, current stock levels and sell-through for the previous peak. Explain how much you plan to order and why, and what you do with leftover stock. Show what you will do if sales run behind: discount, pause orders, or sell stock through another channel.

Be clear about the type of financing you are seeking, such as a line of credit or a loan secured on stock, and how repayment is timed to the sales. Ask the lender what they look for, including any conditions on how the business is run, and have your accountant review the proposal first. A short written loan proposal with the numbers and the plan, rather than a verbal request, shows you have thought it through. Keep a copy of every document you give the lender.

Key takeaways

• Chart sales by month across a full cycle and mark the peak.
• Show the gap between paying for stock and being paid.
• Explain your plan for slow-selling stock.