This is sometimes called a revolving line of credit because of the repeat borrowing and repayment provisions. These loans, which usually must be secured by collateral, allow you to maintain an even cash flow with which to operate your business. They may allow you to take advantage of special discounts offered by suppliers, or to gear up for a special sales effort. They can tide you over until a customer pays a big bill. One type of line of credit bearing special mention is the seasonal line of credit.
Many businesses have a strong seasonal nature.
There may be a time when you need capital to prepare for a seasonal product. The period between its production and the income it produces may be lengthy. Cash flow may be diminished, but you need to keep operating. When applying for such a seasonal loan, determine how much you will need and, based on past experience, when you will be able to repay it. Don't borrow more than you need.