How to Get Through the Slow Season With MCA Payments

You get through the slow season with MCA payments by planning before it arrives: find your slow months in last year's bank statements, work out what the fixed daily debit will take from those thinner deposits, and bank the difference while sales are strong. If a month still runs short, use your contract's reconciliation right if it has one, or call the funder early, and skip the second advance. Your real worry is simple: the debit doesn't know it's September.

Picture an owner like Dana Pruitt. She runs a forty-seat breakfast-and-lunch café two blocks off the sand in a Gulf Coast beach town, and from January through April she can't buy a quiet morning. Snowbirds, spring breakers, families stretching a long weekend. In March her deposits hit $118,000. In late May, after the walk-in cooler gave up, she took a $72,000 merchant cash advance with a $97,200 payback, collected as $720 every business day. The funder sized that debit off her February, March and April bank statements, which averaged $100,800 a month. Fifteen percent of that, spread over about 21 business days, comes to $720 a day. Tidy.

Now it's the first week of June, and Dana is studying the calendar the way a farmer studies the sky. Every year her deposits slide through the summer and bottom out in September, when the beach empties, the kids go back to school and the weather radio stays on. Last September she deposited $58,000. Twenty-one debits of $720 come to $15,120. That's 26 cents of every September dollar going to one creditor before she buys a single egg.

Dana is a composite, not a real client, but her problem is a familiar one: a payment sized in her best months and collected in her worst. The good news is that a slow season is the one kind of bad weather you can see coming months ahead, and the moves below work best made 60 to 90 days early. None of this is legal or tax advice. Hamilton & Merchant is not a law firm or a CPA firm, and where a step needs a lawyer or an accountant, get your own.

What happens to my MCA payments when sales slow down?

If your advance collects a fixed daily debit, nothing happens to the payment. The same dollars leave on the same days, so the debit eats a bigger share of every dollar you deposit. If your advance takes a true percentage of card sales, the payment shrinks with your sales and the payback stretches out instead.

Dana has the fixed kind. This is what $15,120 a month looks like against her deposits:

• February through April, the months the debit was sized on: about 15% of deposits.
• June, at $80,000: 18.9%.
• August, at $66,000: 22.9%.
• September, at $58,000: 26.1%.
• October, at $70,000: 21.6%.

Notice what stayed put: the debit. Her food orders shrink in September and she cuts shifts, but rent, insurance and the power bill don't take the fall off, and neither does the funder. A fixed daily debit behaves like one more fixed bill unless the contract gives you a way to correct it and you use it on time. Some fixed debits are, on paper, an estimate of a percentage of your receipts, with a clause to true them up; others carry no such right. Find out which you signed in June, not September, starting with the MCA contract clauses that matter most.

Why do so many businesses have a slow season?

Because customers live on calendars. Shoppers spend in December and rest their wallets in January, homeowners buy mulch in spring, heating-oil customers fill their tanks in winter, and a Florida beach town thins out when the snowbirds fly north. A slow season is normal for a healthy business. Trouble starts when the obligations are priced as if every month were the best one.

The Census Bureau's monthly retail survey shows how deep some of these dips run. In 2025, before any seasonal adjustment:

• Clothing stores sold 46.5% as much in January as in December. Less than half.
• Building material and garden stores sold 66.9% as much in February as in May, their busiest month.
• Gift, novelty and souvenir shops sold 45.3% as much in February as in October.
• Fuel dealers ran the other way: June sales were 35% of January's. Their slow season is your beach season.

Service businesses aren't in that table, but you know your own trade: the lawn crew watches the grass stop growing, the pool company watches the covers go on. What you need is how lean, in dollars, next to the debit, and that's sitting in your bank statements. Nobody gets mad at January for being cold. Sensible folks just buy the coat in October.

How seasonal are U.S. stores and restaurants?

Seasonal enough to matter. In 2025, U.S. retail sales in January were 79.6% of December's, and restaurant and bar sales in their weakest month ran 81.7% of their best. National totals like these smooth out the swings any single shop feels.

The Census Bureau publishes an adjusted series, which strips out seasonal swings and holiday and trading-day differences, and a not-adjusted series, which shows what actually went through the registers. Your funder doesn't seasonally adjust the debit, so the not-adjusted numbers are the ones that count. Measured against an average month of 2025:

• U.S. retail stores peaked in December at 113.8% of an average month and bottomed out in February at 86.8%.
• U.S. restaurants and bars peaked in May at 107.8%, with August close behind at 106.0%. Their low months were February at 88.0% and January at 89.2%.

One surprise hides in there. February looks like the worst month for both series, but February 2025 had only 28 days. Per day, January was weaker: restaurants and bars took in about $2.48 billion a day in January against about $2.71 billion in February, and retail showed the same pattern. A short month also means fewer debit days, so January is the one that bites: a full slate of debits against the weakest daily sales of the year. The figures cover businesses with paid employees and aren't adjusted for price changes; they describe the country, not your corner.

How do I find my slow season in my own bank statements?

Pull at least 24 months of business bank statements, total the real sales deposits for each month, and divide each month by your average month. Any month under about 90% of average is a slow month for planning purposes, and your lowest three are your winter, whatever the thermometer says.

1. Gather two years, because one storm or one giant catering job can make a single month look strange.
2. Total deposits by month, and strip out money that isn't sales: transfers between your own accounts, loan or advance proceeds, refunds and owner contributions. An MCA funding deposit looks like a record month and means the opposite.
3. Add up the last twelve months and divide by 12. That's your average month.
4. Divide each month by the average and multiply by 100. That's your seasonal index; 100 is an ordinary month.
5. Circle every month under 90 in red, and the lowest three twice.
6. Next to each red month, write the MCA debits that will hit it: the daily debit times the business days, or the weekly debit times the weeks.

The chart below shows the national restaurant pattern from 2025, drawn the same way. Hold your own index up next to it.

The national curve is gentle, with nothing below 88. Dana's is a roller coaster: her average month is about $84,900, so September at $58,000 sits at 68 and March at $118,000 sits at 139. Use bank deposits, not your point-of-sale report, and combine every account, because the debit comes out of the bank, and the bank is where the cash either is or isn't.

When is the slow season in Florida?

Statewide, Florida's busiest quarter is January through March, and the second half of the year is thinner. After 41.2 million visitors in the first quarter of 2025, the fourth quarter drew an estimated 33.5 million.

Then there's the actual weather. The official Atlantic hurricane season runs from June 1 to November 30, and the National Hurricane Center puts its peak on September 10, with most activity between mid-August and mid-October. For a coastal business with a late-summer slump, the thinnest deposits and the riskiest weeks can land on the same page of the calendar. That's one more reason the reserve gets built before August.

Statewide numbers are a blend, though. A theme-park corridor, a Panhandle beach town, a Keys bait shop and a Miami restaurant can each keep a different calendar, and a business that serves locals may follow school calendars and paydays more than the visitor count. Your own statements settle it.

How big does the daily debit get when deposits drop?

Divide a month's total debits by that month's deposits. A debit that takes 15% in your best months can take a quarter or more in your slowest, because the debit holds still while the deposits fall.

Here is Dana's summer. "Other bills" means everything except the MCA: rent, payroll, food, insurance, utilities and the equipment lease. Those fall in the slow months too, just not as fast as her sales.

• June: $80,000 in, $62,000 in other bills, $18,000 left. The MCA takes $15,120, leaving $2,880.
• July: $76,000 in, $60,000 out, $16,000 left. After the MCA, $880.
• August: $66,000 in, $56,000 out, $10,000 left. After the MCA, $5,120 short.
• September: $58,000 in, $52,000 out, $6,000 left. After the MCA, $9,120 short.
• October: $70,000 in, $57,000 out, $13,000 left. After the MCA, $2,120 short.

August through October leave Dana $16,360 short. June and July leave her $3,760. If she starts June with no spare cash, she runs dry in late August, and the hole tops out around $12,600 at the end of October.

Dana's café makes money over a full year; March alone cleared about $30,000 before any MCA. This is a cash-timing problem, the kind behind being profitable on paper and broke in the bank. Twelve thousand six hundred dollars is a fixable number in June. In the last week of September it's an emergency.

Plug your own daily debit and monthly deposits into the forecast tool below to see which of your months turn red.

Is a split-percentage MCA better than a fixed daily debit for a seasonal business?

For cash flow, usually yes. A true split takes a percentage of each day's card sales, so a slow month pays less on its own and the payback simply takes longer. Price is a separate question: a split with a steep factor rate is still an expensive advance.

A 2015 note from the Federal Reserve Bank of Cleveland described the card version: a business got $40,000 in exchange for $52,000 of future revenue, repaid through swipes of around 10 percent of its daily credit card receipts. Slow day, small swipe. The fixed daily ACH debit works differently. In a 2017 federal case in Manhattan, the contract treated set daily debits as base payments credited against 15% of the merchant's daily receipts, and after reviewing monthly bank statements the funder had to credit or debit the difference. On paper that's still a percentage deal. In practice it only behaves like one if somebody runs the reconciliation.

The table runs Dana's September through all three structures. The split column assumes the same 15%, taken from card sales, with 85% of her sales on cards.

In the deals courts have described, the funder collects until it has received a set purchased amount, so a slower month mostly moves the finish line rather than adding dollars; check your own contract for fees that could change that. None of this makes an advance a villain. For a profitable, high-margin business buying something that pays for itself, an MCA can be a reasonable tool, and the trouble starts with misuse, like covering losses or stacking; when an MCA makes sense and when it doesn't walks through the difference. For a seasonal business my rule is short: size the payment to your slowest month, not your best.

What is the reconciliation right, and how does it help in a slow month?

A reconciliation right is a contract clause that lets you ask the funder to compare what it actually collected with the agreed percentage of your actual receipts, then fix the difference. In a slow month it's the tool that pulls a fixed debit back toward the percentage you sold.

Run Dana's numbers through it. Her deal is built on 15%. In September, 15% of $58,000 is $8,700, against $15,120 debited, a $6,420 gap. Do the same for August ($9,900) and October ($10,500), and her three-month shortfall of $16,360 shrinks to about $100. That's the difference between a terrible fall and a boring one.

Two catches. First, timing: in the 2017 federal case, the true-up came after the funder reviewed monthly bank statements, so September's full debit still leaves in September and the correction lands later. Dana still needs cash to float the gap. Second, wording. A reconciliation clause is worth exactly what its words and deadlines say, and New York's appellate courts have read those words closely:

• In LG Funding, LLC v. United Senior Properties of Olathe, LLC (2020), the Second Department said courts usually weigh three factors: whether there's a reconciliation provision, whether the agreement has a finite term, and whether the funder has recourse if the merchant declares bankruptcy. That contract let the funder adjust payments at its "sole discretion," and the court let the merchant's usury defense stand.
• In Principis Capital, LLC v. I Do, Inc. (2022), the agreement provided for monthly payments to adjust with changes in monthly sales, and the same court held the deal was not a loan.
• In 2023, the same court held that an agreement debiting $4,000 every business day, with the funder "under no obligation" to reconcile, was a criminally usurious loan.

Whether a deal is a loan under New York law is lawyer territory, and courts elsewhere can see it differently. The slow-season lesson is plainer: "shall reconcile" and "may reconcile" are different animals, and if your wording worries you, a business lawyer licensed where you are should read it.

Florida added a paper trail of its own. For commercial financing of $500,000 or less signed on or after January 1, 2024, Florida law requires providers, other than exempt ones such as banks, to give a written disclosure at or before signing, and when payments can vary it must describe how they're calculated and when they can change. If you got one, dig it out. The full how-to is in the reconciliation right in MCA contracts.

Can I ask an MCA funder to lower payments during the slow season?

Yes. If your contract has a reconciliation clause, ask in writing and send the documents it requires. If it has none, or the true-up still leaves you short, you can ask for a temporary modification; the funder doesn't have to say yes, and results vary.

1. Find the clause and its deadline, and put the deadline on the calendar in ink.
2. Gather exactly what the contract asks for. In the agreement the 2017 federal case described, that meant monthly bank statements, and under its terms a missed month meant the funder no longer had to reconcile future payments.
3. Do the math for the funder: the specified percentage times your actual receipts, next to what was actually debited.
4. Send the request in writing, keep proof of delivery and keep copies.
5. Call before a debit fails, never after. In a 2021 New York decision, the court pointed to agreements that made the rejection of an automated debit on two or three occasions without prior notice an event of default, letting the funder demand the full uncollected balance. Read your own default section.
6. If there's no clause, or the true-up isn't enough, ask for a specific, temporary reduction for named months, and offer the full debit back when your harvest returns.

A plan with dates sounds like a business owner; a plea with no numbers sounds like a default in progress. The step-by-step on modifications is in lowering an MCA daily payment without defaulting. And don't block the debit at the bank and hope; stopping MCA ACH withdrawals the right way explains why.

When should I start preparing for the slow season?

Start 60 to 90 days before your first slow month, and earlier if you can. The best time to prepare is during your busiest months, while deposits are big enough to set money aside without feeling it. The harvest is when you fill the barn. Winter is when you find out whether you did.

• Ninety days out: run your forecast, read your contract, and note the reconciliation deadline and documents.
• Sixty days out: if the math shows a gap, call the funder with numbers, and lock in cost cuts, schedules and vendor terms.
• Thirty days out: confirm the reserve, and confirm your payroll tax deposits and sales tax filings are current.
• First slow month: send the reconciliation request as soon as the statement is in hand, and review cash weekly.
• First busy month after: refill the reserve before you buy anything shiny.

Dana is starting about 60 days ahead of August, which is workable, but her harvest is behind her, so this year's plan leans on the true-up, the cuts and the $3,760 that June and July leave her. Next year it starts in January. Get your ducks in a row while the ducks are fat.

How much cash should a seasonal business keep in reserve?

Enough to cover the gap between your slow-season deposits and your slow-season bills, MCA debits included, for the whole slow season, plus a cushion. That number is personal, and for a seasonal business it can sit well above the 27 days of cash people like to quote.

The 27 comes from a JPMorgan Chase Institute study published in 2016. The median small business held 27 cash buffer days, meaning it could pay 27 days of its usual outflows from its cash balance with nothing coming in. A quarter held fewer than 13 days, and a quarter held more than 62.

Now the surprise. That study deliberately left seasonal businesses out: its sample was screened to businesses whose activity showed they were not seasonal. The famous 27 days describes businesses with steadier months than yours, and a seasonal owner who copies it is borrowing somebody else's umbrella. A later Institute study, from 2019, found that firms with limited cash buffers and irregular cash flows were the least likely to survive. Thin cash and lumpy cash make a bad pair.

So build your own number. I call it the acorn number:

1. From your forecast, add up the shortfall in every slow month, MCA debits included.
2. Assume no help from reconciliation. If the true-up comes through, treat it as a bonus.
3. Add a cushion for what you can't forecast, like a storm week or a refrigeration repair. I like at least two weeks of debits.

Dana's slow-season shortfall is $16,360. Two weeks of debits is $7,200. Her acorn number is about $23,600. Longer term, aim deeper; building a 90-day business cash reserve shows how to get there a month at a time.

How do I build the reserve during the busy months?

Skim a fixed slice of every busy-month deposit into a separate account before you spend any of it. Divide your acorn number by the number of busy weeks and move that amount every week, automatically.

A squirrel doesn't wait for the first frost to start burying acorns. He works while the oaks are dropping them faster than he can eat. Dana's oaks drop January through April, about 17 weeks, so her $23,600 acorn number works out to roughly $1,400 a week, a skim she'll barely notice in a March that cleared $30,000.

A daily debit gets priced in the harvest and collected in the winter, so do the winter math before you sign.

A few rules keep the acorns buried:

• Automate it. A weekly transfer you set once beats a good intention you renew every Monday.
• Keep deposits where your contract says they go. If it names a bank account for your receipts, let deposits land there and move the reserve afterward as an ordinary transfer, with records. In the 2017 federal case, the merchant had agreed to deposit all its receipts into a designated account, and the funder sued claiming it had stopped.
• Spend it on the slow season only, and refill it first when the harvest returns.

You'd be in plenty of company needing this: in the Federal Reserve Banks' 2025 report on small employer firms, 51% named uneven cash flows as a financial challenge.

Which costs should I cut before the slow season?

Cut the costs that rise and fall with customers, and cut them before the slow months start: staff hours, inventory, opening hours and subscriptions. Protect the costs that bring customers back and the bills that carry personal risk, like payroll taxes and sales tax.

Trim these

• Staff hours. Build slow-season schedules from last year's deposits by week, and post them early.
• Inventory. Smaller, more frequent orders and a shorter menu or product list mean less cash on shelves and less waste.
• Opening hours. If Tuesdays in September barely cover the lights, close on Tuesdays in September.
• Vendor terms. Ask suppliers for longer terms in June, while you're current. The same request in September, with an invoice already late, lands differently.

Protect these

• The marketing that fills your shoulder months, aimed at locals and off-season regulars.
• Key people you'd struggle to rehire when the harvest returns.
• Insurance, especially through hurricane season.
• Payroll tax deposits and sales tax. More on those below.

Use the quiet weeks for repairs and deep cleaning. Cutting costs in late September is bailing a boat with a fork; cutting them in July is closing the hatch before the rain. If the hole is bigger than cuts and a reserve can fill, look at raising cash in 30 to 60 days before another advance.

Should I take another advance to get through a slow month?

Usually not. A second advance adds a second debit that comes due in the same thin months you were trying to cover, and you pay a factor on top for the privilege. If your first contract has an anti-stacking clause, taking one can also put you in breach.

Run it for Dana. Say that in August she takes a $20,000 second advance with a $27,000 payback at $450 a business day, about three months of debits. September's debits jump from $15,120 to $24,570, or 42.4% of her $58,000 in deposits. The $20,000 plugs the hole for a few weeks, but the extra $27,000 comes out of August, September and October, the very months that were short. Her slow-season gap grows from $16,360 to $23,360. She paid $7,000 to make the problem bigger.

Borrowing from October to pay September is burning the porch to heat the house.

Stacking doesn't need a reckless owner. All it needs is one rough month and an offer that lands in the inbox the same week. Each new advance takes a bite before the last one is finished, until the deposits can't feed them all; how MCA stacking happens lays out the mechanics, and why renewing an advance costs twice covers its cousin. Folks will tell you a second advance buys time. That dog won't hunt. For Dana it bought a few weeks, and the bill came due in the same months as the first one.

What other financing fits a seasonal business?

A revolving line of credit is the classic tool for a seasonal swing: draw on it in the slow months and pay it back down in the busy ones. The SBA even has a program built for this pattern, the Seasonal CAPLine.

The SBA describes CAPLines as an umbrella program for short-term and cyclical working-capital needs. The Seasonal CAPLine finances the seasonal build-up of accounts receivable and inventory, sometimes along with the labor that goes with it, and it can be revolving or non-revolving. The SBA lists a maximum maturity of 10 years for CAPLine loans, and most 7(a) loans top out at $5 million. The 7(a) Working Capital Pilot offers monitored lines of credit up to $5 million with a maximum maturity of 60 months.

Hold your horses before you apply in August. A slow-season statement with two MCA debits on it doesn't show you at your best. Apply during or right after your busy months, when the deposits tell your best story, and expect a lender to look closely at any advance you already carry; getting an SBA loan after MCA debt covers what they look for. To weigh the options side by side, see MCA vs. line of credit vs. term loan vs. SBA. For a seasonal business, the best financing is the kind whose payments are lightest exactly when your sales are.

Which bills come first when the slow season hits?

Trust fund taxes come first: the payroll taxes you withheld from employees and the sales tax you collected from customers. Then payroll itself and the bills that keep the doors open. Everything else, funders included, gets a phone call before it gets missed.

The IRS treats the income tax you withhold and your employees' share of Social Security and Medicare as trust fund taxes. Under section 6672 of the Internal Revenue Code, a responsible person who willfully fails to pay them over can owe a penalty equal to the full unpaid amount, personally, and the IRS says using available funds to pay other creditors when the business can't pay its employment taxes is an indication of willfulness. Paying the funder instead of the IRS in a slow month is exactly that choice; how payroll tax debt follows you personally has the details.

Florida's sales tax works on the same idea. Under Florida law, sales tax becomes state money the moment you collect it. Each month's tax is due on the first of the next month and delinquent on the 21st, and a person who willfully fails to pay it over can face a penalty of twice the tax; why sales tax is the one bill you can't negotiate explains the rest.

After the taxes come payroll, rent, utilities, insurance and the suppliers you can't operate without; then the funders, called before you miss. The full pecking order is in the one creditor you always pay first. Tax questions belong with your own CPA, and guarantee or lawsuit questions with your own lawyer.

What to do this week

1. Pull 24 months of business bank statements for every account that takes deposits.
2. Total the real sales deposits for each month, stripping out transfers, loan or advance proceeds, refunds and owner money.
3. Build your seasonal index and circle every month under 90.
4. For each circled month, divide the MCA debits by the deposits, or let the forecast tool above do it.
5. Find your reconciliation clause. Write down the deadline, the documents it requires and where requests go.
6. If you signed a Florida deal of $500,000 or less on or after January 1, 2024, find the disclosure you got at signing and read the payment section.
7. Work out your acorn number, then open a reserve account and set an automatic weekly transfer for your busy months.
8. Write a cut list with dates: schedules, inventory, hours, subscriptions and vendor terms.
9. Check that payroll tax deposits and sales tax filings are current. If they aren't, call your CPA this week.
10. If a second advance is tempting you, run its total cost through the MCA cost calculator and its debit through your forecast before you sign anything.

That's an afternoon or two of work, and the cheapest insurance you'll ever buy.

When is it time to get outside help?

Get help when the forecast shows a gap your reserve and your cuts can't close, when a reconciliation request is ignored or refused, when you're about to take a second advance to cover the first, or when you're choosing between the funder and the tax deposit. Those are the moments when one good conversation can keep you from a bad decision.

A default notice, bounced debits or a frozen account are signs too; if a notice arrives, read what to do after an MCA default notice the same day. Whoever you call, ask how they're paid and get it in writing; how to vet a business debt relief company has the questions.

If you'd like to talk it through, call Hamilton & Merchant for a free, confidential first conversation at (407) 993-1416. It's a chance to lay your numbers on the table and understand your situation and the right kind of help for it, whether that's a lawyer, a CPA, a lender or a plan you can carry out yourself. If you'd rather read first, start with merchant cash advance relief.

Dana's September is coming whether she plans for it or not. So is yours. The only question is whether it arrives like a storm nobody tracked or like a cold front you watched on the radar for a month, with the shutters already up. The ball's in your court, and it's a lot lighter in June.

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