Managing cash flow in a seasonal business

A seasonal business can make most of its annual profit in a few busy months, then spend the rest of the year paying it back out. A Queenstown tour operator earns hard through ski season and summer, a Bay of Plenty kiwifruit contractor lives by the harvest, a Coromandel cafe fills up over Christmas, and a builder in Southland watches work slow as the days shorten. The profit is real. The problem is timing.

Seasonal business cash flow is about making the good months pay for the quiet ones, without running out of cash in between. This guide shows you how to map your year, calculate the size of the off-season gap, build a reserve and choose the right funding if the reserve isn't enough. If you own property, we'll also explain how fundU structures loans that can be repaid from the next busy season.

What makes seasonal business cash flow different?

In a seasonal business, income is concentrated in a few months while many costs are spread evenly across the year. That creates a predictable annual cycle: cash builds during the peak, then drains during the trough.

The trouble starts when the reserve built in the peak doesn't last until the next one. That can happen because of a poor season, rising costs, an early close or a late start, or because peak profits were spent on the assumption that next year would be the same.

Hospitality has felt this sharply. Centrix's July 2026 Credit Indicator reported 421 hospitality company liquidations in the year to May 2026, up 51%. Many were businesses with loyal customers and strong peak trading that simply couldn't carry their costs through the quiet months.

When are the peaks and troughs for New Zealand industries?

Every business is different, but most seasonal Kiwi businesses follow one of a handful of patterns. Knowing yours is the first step to planning for it.

Industry	Typical peak	Typical trough	Pressure points
Summer tourism and hospitality	December to March	May to September	Staff costs before summer, winter rent and rates
Ski-season tourism	June to September	October to November and April to May	Pre-season hiring and stock, shoulder-season gaps
Horticulture (kiwifruit, apples, grapes)	Harvest, roughly February to June	Winter and spring growing period	Seasonal labour, orchard and vineyard inputs before harvest
Agriculture (dairy, sheep and beef)	When milk or stock income arrives	Dry periods and low-production months	Feed, fertiliser, animal health and contractor bills
Construction and trades	Spring to autumn	Winter months and the Christmas close-down	Wet-weather days, slow council and client decisions
Retail and gift	November and December	January to April	Buying stock ahead of Christmas

Your own pattern may be different, especially if you trade across several seasons or regions. Use your own bank statements, not an industry average, to map it.

How do you build a 12-month seasonal cash flow forecast?

A seasonal cash flow forecast shows, month by month, how much cash comes in, how much goes out and what your bank balance will be at the end of each month. It turns a vague worry into a clear number.

1. Pull 24 months of bank statements. Two years shows whether your pattern is steady or shifting.
2. Record monthly income. Use actual receipts, not invoiced sales, because cash is what matters.
3. List fixed costs. Rent, council rates, insurance, loan repayments, subscriptions, core wages.
4. List variable costs. Stock, seasonal wages, fuel, packaging, contractors.
5. Add tax. GST, PAYE and provisional tax instalments, on the dates they actually fall due.
6. Calculate the monthly net. Income minus outgoings for each month.
7. Run the balance forward. Start with today's bank balance and add each month's net.
8. Find the lowest point. That's your trough, and the gap between it and a comfortable buffer is what you need to cover.

Build a second version with a weaker season, say 15% lower peak income and a two-week late start. If the business still gets through, you're in good shape. If it doesn't, you know what to plan for.

A tax payment that falls due in your quietest month can turn a manageable trough into a crisis. Our guide to provisional tax cash flow planning explains how to see those dates coming and plan for them.

Which costs keep running when the season ends?

Most of them. Seasonal owners often underestimate the fixed costs that don't stop just because customers do.

• Premises: rent, council rates, insurance, power and security.
• Finance: loan and lease repayments, equipment finance.
• Core staff: the managers, chefs, operators or tradespeople you can't afford to lose.
• Tax: GST on late-season sales, PAYE on continuing wages and provisional tax based on last year's income.
• Maintenance and compliance: servicing vehicles and equipment, licence renewals and off-season repairs.

Wage costs have risen in 2026. The adult minimum wage went up to $23.95 an hour from 1 April 2026, and the default KiwiSaver contribution rate rose to 3.5% from the same date, which lifts employer contributions too. For a business carrying a core team through winter, both increases lift the monthly floor you need to fund.

How do you build a reserve for the off-season?

Treat the reserve as a bill you pay yourself during the peak. Decide the amount from your forecast, then move a fixed share of every good week's takings into a separate account you don't touch until the trough.

Practical ways to make it stick:

• Automate it. Set up an automatic weekly transfer on the same day wages are paid.
• Separate tax money too. Put GST and PAYE into their own account as you collect them, so peak-season tax is ready when it falls due.
• Hold back on drawings. Owners' drawings are often highest in the peak. Plan them across the whole year instead.
• Avoid peak-season spending sprees. New equipment or a fit-out bought in January uses cash you'll need in June. Time big purchases for when you know the reserve is covered.

What should you do in the last month of the peak?

The final weeks of the busy season are when your options are widest. Cash is still coming in, your bank statements look strong and you haven't yet felt the squeeze.

Use that window to run a quick end-of-peak checklist:

• Update the forecast with actual peak results, not the budget you set months ago.
• Confirm the reserve is where it needs to be, and top it up while takings are still high.
• Pay down or clear expensive debt so fewer fixed repayments run through the quiet months.
• Line up funding now if the forecast shows a gap. Lenders see a business in good shape, rather than one already under pressure.
• Talk to staff early about off-season hours, so there are no surprises for them or for you.

Owners who make these calls in the last month of the peak usually get through the trough calmly. Those who wait until the first quiet month often end up making them in a hurry.

How can you reduce the size of the trough?

The smaller the gap, the less you have to save or borrow. Many seasonal businesses can flatten their year more than they think.

• Add shoulder-season income. Corporate bookings, functions, off-season packages or local-market offers can keep some cash coming in.
• Diversify services. Contractors can add maintenance or winter work. Orchards can offer packing, storage or contracting to neighbours.
• Negotiate seasonal terms. Ask your landlord about seasonal rent structures and suppliers about extended terms before the peak.
• Take deposits in advance. Pre-season bookings with deposits bring cash forward.
• Reduce fixed costs. Review subscriptions, vehicle numbers and storage you only use for part of the year.
• Plan staffing honestly. Keep your core team, and agree seasonal hours clearly with everyone else before the peak ends.

What funding options suit a seasonal business?

The right funding matches repayments to your seasonal cycle. A loan that demands the same repayment every month of the year can make a trough worse.

Option	How it fits a seasonal business	Limitations
Bank overdraft	Flexible for small, predictable dips	Limits may be reviewed after a weak season
Supplier seasonal terms	Delays payment for peak stock until you've sold it	Only covers that supplier's goods
IRD instalment arrangement	Spreads a tax bill over time	Penalties and interest may still apply
Short-term daily or weekly repayment loan	Quick to arrange	Fixed debits continue through the quietest months
Property-secured loan with interest-only or capitalised interest	Repayment can be structured around the next peak	Needs property security and a clear exit

Inland Revenue's instalment arrangements can help if a tax bill lands in the wrong month, but the arrangement adds a fixed monthly payment through the trough, and penalties and interest can continue. For larger or recurring gaps, many owners prefer a single property-secured facility arranged before the quiet season starts.

How does fundU help seasonal businesses?

fundU is a direct private lender. We lend $20,000 to $1m to New Zealand businesses, secured by a first or second mortgage over residential, commercial or industrial property, with some land and lifestyle property considered case by case. Because we make our own decisions, we understand that a seasonal business doesn't look like a nine-to-five office.

For seasonal owners, what matters most is structure:

• Repayments that fit the cycle. Depending on the approved terms, loans can be interest-only or have capitalised interest with no scheduled monthly repayments during the term.
• An exit built around your peak. Repayment can come from the next season's trading, a sale or a refinance to your bank.
• Low paperwork up front. No financial statements or tax returns are needed for the initial assessment. Bank statements that show your seasonal pattern tell the story well.

See our hospitality and tourism and rural and agribusiness pages for more on how we work with those sectors, and our Queenstown business loans page if you trade in the Southern Lakes.

Example scenario

A family-owned tourism and cafe business on the Bay of Plenty coast had a strong summer, but a wet autumn cut the shoulder season short. The owners' forecast showed the account would run dry by late July, with a provisional tax instalment and two months of rent still to come before spring trading picked up.

They approached fundU in May, while their peak-season statements were still fresh. The owners' home was worth about $1.05 million with a bank mortgage of around $450,000. fundU approved a second mortgage of $110,000 with capitalised interest, so there were no scheduled monthly repayments during the term. The funds covered the provisional tax, rent, core staff wages and pre-season stock. The planned exit was repayment from the following summer's trading. This is an illustrative example, not a real customer.

Key takeaways

• Map your year with a 12-month cash flow forecast built from your own bank statements.
• Find your lowest point and test a weaker season so you know the true size of the gap.
• Budget for costs that keep running, including rising wage costs and tax that falls due in quiet months.
• Build a reserve during the peak with automatic transfers, and keep tax money separate.
• Flatten the trough with shoulder-season income, deposits and seasonal supplier terms.
• Arrange funding before the off-season, with repayments structured around the next peak.

Get ahead of the quiet season

If your forecast shows a gap before the next busy season, it's far easier to fix now than when the account is empty. fundU can structure a property-secured loan around your seasonal cycle. Find out more about our working capital finance and short-term business loans, then see if you qualify. It takes a couple of minutes, doesn't affect your credit score, and a lending specialist will call you back. Or call us on 09 875 4577.