How a Strong Relationship With Your Lender Can Help You Manage Inventory Seasonality
Inventory ebbs and flows can feel like a roller coaster ride, especially if you’re balancing the demands of winemaking or CPG production against tight cash reserves. I’ve had countless conversations with founders who see big spikes in production costs — often months before revenue kicks in — and wonder how they’ll keep the lights on, let alone fund their next product run. The good news is that a strong relationship with your lender can smooth out many of these bumps and make managing inventory seasonality far less stressful.
When you build a close lender relationship and master what I call financial teamwork, you gain access to flexible solutions that mitigate seasonal cash flow strains, maintain stable operations, enhance brand awareness, and fuel long-term growth. Keep reading to learn how these partnerships work, why they matter, and how you can start cultivating a lender relationship that supports your goals year-round.
Understanding inventory seasonality and its impact
Seasonal inventory cycles affect your production schedule, revenue timing, and overall cash flow. In the wine world, you might incur heavy costs during harvest for grapes, barrels, specialized equipment, and labor months before you see revenue from bottling and distribution. In the CPG space, holiday sales might account for the bulk of your annual profits, so you spend the fall stocking up on raw materials or finished goods to meet the surge.
When your expenses hit before you have cash in hand, a gap emerges. If you can’t bridge that gap, you may cut corners, miss opportunities, or even risk turning away potential sales. That’s why seasonal inventory financing becomes so pivotal. You need working capital to handle spikes in production or fulfill large orders. For wineries, that might look like stocking enough wine to carry you through the slower tasting-room months. For CPG brands, it could mean buying ingredients for a holiday push well ahead of December.
Regular banks often don’t appreciate the nuances of managing inventory seasonality for wineries and food producers. They see a temporary dip in sales or a higher-than-usual inventory purchase and interpret it as financial instability. A strong lender relationship, on the other hand, gives you room to maneuver because the lender expects these fluctuations and offers solutions that align with the natural rhythm of your business.
The benefits of a strong lender relationship
I’ve always believed that a lender relationship should feel like a long-term partnership, not a series of one-off transactions. That means forming a bond with someone who understands your market — where cash flow for wineries and CPG brands can be cyclical — and has the tools to help you plan accordingly:
Flexible financing options. Different financing solutions can be structured around your harvest, holiday surge, in-store promotions, or other predictable seasonal factors. Rather than forcing you into a rigid repayment schedule, a strong lender may delay the principal portion of payments during slow months or grant extra working capital for seasonal businesses at the right moment.
Better terms and confidence. When your lender sees you as a reliable partner, they’re more likely to reduce interest rates, boost credit limits, extend flexible payment windows, or offer short-term loans without mountains of paperwork. I’ve watched founders negotiate far more favorable terms simply by maintaining open communication and showing lenders solid forecasts.
Proactive support and networking. A lender who knows your industry may offer capital and introductions to potential distributors, local retailers, buyers, or coveted industry resources.
Tips for building a strong relationship with your lender
To stay on good terms with lenders:
Schedule regular check-ins. You don’t want your lender hearing from you only when an emergency strikes. I reach out to my lending contacts throughout the year to discuss client updates, upcoming projects, changes in consumer trends, and shifts in the market. You can do the same by setting up quarterly or even monthly calls. These conversations keep your lender in the loop and foster trust.
Share clear financial forecasts. When you provide accurate data on sales projections, production costs, and future revenue, it becomes easier for lenders to grasp your cash flow cycles. Show them historical trends along with realistic growth assumptions. Demonstrate that you’ve considered best-case and worst-case scenarios, so they see you as a thoughtful partner.
Be transparent about challenges. Sometimes, things don’t go as planned. Harvest yields drop, shipping delays occur, shifting consumer demand hits your forecast, or supply chain disruptions lead to ingredient shortages. If you speak up early, a good financial partner might provide grace periods or offer bridge financing so you can navigate the hiccup without derailing your entire operation.
Position yourself as stable. Keep your internal records organized and lean on experts who know the ins and outs of accounting for wineries or specialty foods.
Flexible financing options for seasonal inventory needs
One size never fits all. You’ll find a range of products that lenders extend to help offset the ups and downs of inventory seasonality. Common solutions include:
Revolving credit lines. You tap the line as needed — maybe to purchase grapes or raw ingredients — and pay down the balance when revenue rolls in. It’s ideal for short-term gaps and can prevent you from tying up cash when sales dip.
Short-term loans. If you anticipate a major expense, like buying specialized packaging for the holiday season, a short-term loan offers a lump sum you can pay off fairly quickly. Good lender relationships mean you might score favorable rates or flexible payment structures tied to your production cycle.
Working capital advances. Lenders sometimes structure working capital for seasonal businesses in a way that focuses on specific inventory orders. You repay the advance as those products sell, which keeps you from having to juggle monthly payments when you’re not bringing in cash.
Purchase order (PO) financing. This option is common in CPG circles. If you secure a large purchase order from a retailer, PO financing covers the cost of producing and shipping the goods before you get paid. Retailers often take weeks or months to pay, so bridging that gap is vital for smaller operations.
For more details, see our article, Top 5 Questions Lenders Ask CPG Brands Before Granting a Loan.
How to use financing to manage inventory and cash flow
To manage inventory and cash flow using credit:
Forecast demand accurately. Study sales data from previous years and factor in new growth or expansion plans. If you’re a winery, think carefully about the timing of harvest, bottling, labeling, and distribution. If you’re a specialty food brand, consider the lead time for packaging and shipping. Good forecasting goes hand in hand with your Cash Conversion Cycle, which reveals how quickly you turn inventory investment into cash.
Time your repayments wisely. Financing aligns best with your business when the repayment schedule matches your cash influx. For instance, if harvest season spikes your labor and raw material costs, structure your loan so that principal payments begin after you sell more wine. You’ll avoid a cash crunch that could undermine your entire production plan.
Stay on top of cash flow. Keep consistent tabs on your daily and weekly balances and know how to manage cash when funds are short. If you sense a crunch coming, talk to your lender before payments are overdue. The earlier you communicate, the more options you have.
Evaluate results season by season. After each busy or slow period, reflect on what worked and what didn’t. Did your advance arrive in time to pay vendors? Were you left with inventory that lingered on the shelves? Collecting this insight positions you to negotiate more effectively with lenders next time or choose a different financing instrument altogether.
Partner with lenders for seasonal success
When you’re in the thick of production, it’s easy to push financing decisions to the back burner. My advice is to engage lenders proactively and see them as strategic partners. Share a solid financial picture, pay on time, host regular check-ins, and outline seasonal needs to maintain strong relationships with lenders.
Want to read more? See our breakdown of the cash conversion cycle (CCC) for owners and founders.
At BBG, we’re serious about maintaining relationships with different lenders and can introduce you to the right one at the right time if you invest in our finance services. Instead of scrambling to cover unexpected costs or turning down big purchase orders, you’ll have the resources to seize new opportunities, invest in the best people, scale your brand, and manage those inevitable ebbs and flows.
Contact Balanced Business Group today, and let’s set you up for smooth sailing through every season ahead.
Author: Pedro Noyola
Pedro Noyola is the CEO of Balanced Business Group (BBG), a company dedicated to helping Founders in the CPG food and beverage industry gain financial confidence. At BBG, Pedro combines traditional accounting with tailored financial guidance, providing industry-specific insights to ensure sustainable growth for passionate food entrepreneurs. He is also an angel investor and a mentor to emerging CPG brands via SKU and TIG Collective. Pedro’s career spans leadership roles at FluentStream, where he helped the company achieve recognition as one of the Fastest Growing Companies in America by Inc., and Telogis, where he was part of a team that grew the company’s recurring revenue from $50 million to $1.2 billion in under five years.
Pedro holds a BA and MPA from The University of Texas at Austin and an MBA from Harvard Business School. He is an active member of the Young Presidents Organization, continually seeking growth in both leadership and learning. Outside of work, Pedro enjoys family time and outdoor activities, drawing personal fulfillment from his roles as a husband and father.
