Cash & Capital

Line of Credit Sizing for Seasonal Cash Gaps

Size a line of credit against your real seasonal cash trough, net of your existing operating reserve, with a safety margin.

Low-month revenue$/monthLow-month expenses$/monthTrough durationmonthsCurrent operating reserve$Safety margin%

Recommended line of credit$14,662.5

Monthly cash gap$15,000

Total trough shortfall$45,000

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Next Decision

Based on your results, these related decisions are available.

Operating Reserve SizingOnce a credit line is in place, revisit whether your cash reserve target should change.

Want to Learn More?

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Methodology

Formula: Monthly gap = max(low-month expenses - low-month revenue, 0). Trough shortfall = monthly gap × trough duration. Net of reserve = max(shortfall - current reserve, 0). Recommended LOC = net of reserve × (1 + safety margin).

Assumption: Sizes a credit line for a known, recurring seasonal pattern, not an unpredictable downturn.

Limitation: A business without a clear seasonal low month should use Operating Reserve Sizing for general risk buffering instead of this engine.