Seasonal Credit

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DEFINITION

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.

INVESTOPEDIA EXPLAINS

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.


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