Seasonal Credit


DEFINITION of 'Seasonal Credit'

Any type of credit arrangement that permits corporate borrowers to consistently pay their overhead and other expenses despite seasonal components of revenue generation. Seasonal credit is usually presented as a line of credit and then becomes classified as revolving credit.

Seasonal credit can also refer to a type of credit offered by the Federal Reserve discount window that can last for up to 90 days.

BREAKING DOWN 'Seasonal Credit'

Seasonal credit is offered to firms that experience seasonal swings in their cash flow. This allows them to continue operating smoothly during months when there may be little or no income.

  1. Discount Window

    Credit facilities in which financial institutions go to borrow ...
  2. Debit

    An accounting entry that results in either an increase in assets ...
  3. Credit

    1. A contractual agreement in which a borrower receives something ...
  4. Revolving Credit

    A line of credit where the customer pays a commitment fee and ...
  5. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  6. Readvanceable Mortgage

    A mortgage feature that allows the borrower to re-borrow the ...
Related Articles
  1. Budgeting

    8 Tips To Help You Control Holiday Spending

    These tips will have you singing "Joy to the World" well into the New Year.
  2. Options & Futures

    Payday Loans Don't Pay

    Hold too tightly to this rescue line and you'll soon be drowning in debt.
  3. Options & Futures

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  4. Credit & Loans

    Home-Equity Choice: Loan or Line of Credit?

    Before using your home as loan collateral, consider both your financing needs and your appetite for uncertainty.
  5. Credit & Loans

    5 Steps To Getting a Home-Equity Loan/Credit Line

    Want to use your residence as collateral for some financing? Our handy how-to guide to getting a home-equity loan or line of credit explains it all.
  6. Credit & Loans

    Home-Equity Loan vs. HELOC: Which Is Better?

    Knowing the difference between a home-equity loan and a HELOC is important. Here's how to tell which is a better fit for your needs.
  7. Entrepreneurship

    Small Business Loan Vs Line of Credit: How They Differ

    Understand the differences between a small business loan and a line of credit, and learn some of the most appropriate uses for each form of financing.
  8. Entrepreneurship

    5 Ways to Get Funding For Your Billion-Dollar Idea

    Understand how current billion-dollar companies gone about funding. Learn about five funding strategies to fund a billion dollar idea.
  9. Entrepreneurship

    Funding A Startup When Bank Loans Aren't Possible

    There are alternative ways to fund your business start-up when it is not possible to secure a bank loan, but consider the costs and risks of each option.
  10. Home & Auto

    Leveraging Leverage For Bigger Profits

    Leverage is like fire. Find out how to use it to heat up your investing without burning your portfolio.
  1. What is the difference between "closed end credit" and a "line of credit?"

    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
  2. What are typical forms of long-term debt for a public company?

    Public companies fund their operational needs and capital expenditures with equity or debt. Most often, companies choose ... Read Full Answer >>
  3. What is the difference between subordinated debt and senior debt?

    The difference between subordinated debt and senior debt is the priority in which the debt claims are paid by a firm in bankruptcy ... Read Full Answer >>
  4. How would a standby letter of credit be used during an export transaction?

    A standby letter of credit is typically used to provide a bank guarantee of payment for an exporter in the event that an ... Read Full Answer >>
  5. What are some reasons banks deny applications for checking accounts?

    Consumers and businesses use credit to finance major purchases or emergency expenses that exceed regular cash flow. Credit ... Read Full Answer >>
  6. What is the relationship between national interest rates and the amount of revolving ...

    National interest rates and the amount of revolving credit issued have a negative relationship. Interest rates rise due to ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  2. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  3. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  4. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  5. Cost Of Funds

    The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!