2 min read
Definition
Seasonal working capital is the additional working capital a business needs to fund its busy season — extra stock, staff and debtors ahead of a peak — that falls away once the season passes. It is a form of temporary working capital tied to a predictable annual pattern.
In plain terms
A retailer building stock before Christmas or a tourism business gearing up for summer needs a burst of extra cash for a few months, then releases it. Because the pattern is predictable, it can be planned and funded deliberately.
Why it matters
Matching seasonal working capital to flexible, short-term finance keeps funding efficient. See managing seasonal cash flow and temporary working capital.
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