Holiday and seasonal inventory can create a difficult funding decision. Ordering too little may mean missed sales, while ordering too much can tie up cash in products that require discounts after the season. Business funding can help an established retailer purchase inventory, pay suppliers, cover freight or support the operating gap before customer sales are collected. It does not make weak demand, thin margins or late inventory profitable. Before accepting an obligation, retailers should calculate seven numbers that connect the order with expected sell-through, usable margin, cash timing and the proposed payment. This checklist does not guarantee approval, sales, profitability, savings, timing or any other result. It is a practical way to replace a broad request for “holiday inventory money” with a documented purchasing and repayment plan.
1. Units already on hand and genuinely available to sell
Begin with an accurate count of inventory that is physically available, saleable and owned by the business. Separate current merchandise from damaged items, customer returns, display units, obsolete styles, products committed to existing orders and goods held on consignment. An accounting quantity is not useful if a meaningful portion cannot be sold at the expected price.
Break the count down by SKU, category, location and age. Compare the current quantity with prior-year beginning inventory and the units that actually sold during the comparable period. A store may feel understocked because a few popular items are low while slower categories still contain substantial cash.
Reconcile the inventory system with a physical count before placing a large order. Investigate material differences caused by receiving errors, shrinkage, transfers, returns or delayed system updates. CashMigo’s retail inventory funding guide provides a broader framework for inventory ownership, vendor terms, sell-through and seasonal purchasing.
2. Expected sell-through by the end of the season
Sell-through measures the portion of available inventory expected to sell during the relevant period. Forecast it by product, not only for the store as a whole. Use prior-year units, recent trends, current traffic, confirmed orders, promotions and product availability. Adjust for changes in location, competition, pricing, assortment and economic conditions.
Distinguish a reasonable base case from an optimistic case. A forecast should not assume that every new unit will sell at full price. Test what happens if unit sales finish below plan or if the strongest sales week shifts later. When a product has no relevant history, use a smaller initial order or staged vendor releases when practical instead of treating an untested forecast as committed demand.
Calculate projected ending inventory after the selling period. That number matters because unsold seasonal merchandise may remain saleable, require storage, move slowly, need markdowns or lose most of its value. Funding should be evaluated against collected sales and realistic residual value—not the original retail price of every unit ordered.
Tell CashMigo what the business needs, how much and how soon. We will review the request and help identify potential next steps.
Check My Funding Options →3. Complete landed cost, not only the supplier price
Landed cost is the cash required to place merchandise in a condition and location where it can be sold. Include unit cost, deposits, freight, insurance, duties, brokerage, inspection, packaging, labeling, warehouse handling, payment-processing effects and expected damage or return allowances when relevant.
Map when each component must be paid. A supplier may require a deposit weeks before shipment and the remaining balance before the goods arrive. Freight, customs or warehouse charges may come due before customer sales begin. The funding amount should reflect this dated cash requirement rather than the final invoice total alone.
Document current quotes and payment terms. If the order is imported, test changes in freight, currency, duty, transit time and port or delivery charges. Avoid using the entire funding amount for merchandise if the business will then lack the cash needed to receive, market and sell it.
4. Gross margin after realistic markdowns, returns and selling costs
Start with expected net sales, then subtract landed cost, planned promotions, likely markdowns, returns, payment-processing costs, marketplace fees, sales commissions and other variable selling expenses. The result is more informative than applying a full-price markup to every unit.
Run at least three cases: a base case, a slower-sales case and a clearance case. In the clearance case, reduce selling prices and increase the quantity remaining after the peak season. This helps show whether the order still produces enough cash to cover operating expenses and the proposed funding obligation.
Do not use revenue as if it were repayment cash. A retailer can generate strong sales while producing little usable cash if merchandise was expensive, discounts were deep or returns were high. The business must still fund payroll, rent, taxes, shipping, advertising and existing obligations before deciding what cash is available for a new payment.
5. Weeks between supplier payment and collected customer sales
Build a weekly cash calendar from the first supplier deposit through the final expected customer collection. Show production, shipping, receipt, stocking, promotion, sale, return window and payment settlement dates. Include delays that have occurred in prior seasons.
The largest cash gap may occur before the busiest sales week, especially when suppliers require payment early and payroll or advertising increases before receipts arrive. Online and marketplace sellers should account for settlement schedules, reserves, chargebacks and returns rather than treating the order date as the collection date.
Compare the timing gap with the structure being considered. A business line of credit may fit repeat purchases when available and responsibly managed; working-capital options may address broader operating needs. Product availability, draw rules, payments, costs, collateral and renewal terms vary. The right comparison begins with the actual cash calendar.
6. Cash already committed to essential operations
Reconcile the operating-account balance and subtract outstanding checks, payroll, payroll taxes, rent, insurance, sales taxes, supplier drafts, credit-card settlements, existing funding payments and other committed cash. Customer deposits may also be restricted by the work or merchandise the business has promised to deliver.
Decide how much cash the business can contribute without putting essential operations at risk. An owner contribution can reduce the amount financed, but the business should not empty its operating cushion merely to complete a larger inventory order. Preserve a documented minimum based on payroll cycles, fixed costs, vendor requirements and the time normally needed to recover from a sales slowdown.
List every existing loan, advance, credit line, card, lease and recurring withdrawal. Place the proposed payment beside those obligations on the same calendar. CashMigo’s article on multiple business-funding payments explains why individually manageable withdrawals can still create pressure when they cluster around payroll, rent or taxes.
7. The proposed payment under a slower-sales scenario
Use the exact terms being evaluated: gross amount, deductions, net proceeds, payment amount, frequency, first payment date, term or expected duration, total repayment or estimated total, early-payoff treatment, collateral, guarantees and any variable or reconciliation provisions. Preliminary examples are not a substitute for the final written agreement.
Place each payment into the weekly cash calendar. Then reduce expected sales, delay the strongest sales week and increase one material cost. Check the lowest projected cash balance and identify which essential obligations are due at that point. If the company must delay payroll, taxes, rent or critical suppliers to remain current, the order size or funding structure deserves another review.
Use the business-funding payment stress test for a detailed method. Potential responses include reducing the order, staging supplier releases, contributing additional cash safely, postponing lower-confidence SKUs, selecting a different structure when available or declining the transaction. A larger approval is not automatically a better inventory decision.
Turn the seven numbers into a documented purchase plan
Summarize the purchase on one page. Include current saleable units, new units ordered, complete landed cost, base and slower-case sell-through, expected net sales, gross margin after markdowns and returns, the peak cash gap, cash contributed, requested amount and the proposed payment schedule.
Attach supporting records such as supplier quotes, purchase orders, inventory reports, prior-year sales, current sales trends, bank statements and a current obligation schedule. CashMigo’s use-of-funds planning article explains how to separate essential costs, optional spending and contingency.
Retailers can review the CashMigo retail funding page, share non-sensitive starting information through the funding check or call 1-844-617-CASH. Applicants ready to provide complete information can use the secure application. Do not send bank statements, identification, tax records or account credentials through social-media messages or unsecured channels.
Frequently asked questions
Can business funding be used to purchase holiday inventory?
Potentially. Availability and structure depend on the applicant, business history, revenue, cash flow, credit, existing obligations, inventory plan, provider, underwriting, documentation and final agreement.
How should a retailer estimate the holiday inventory order?
Start with current saleable inventory, prior-year unit sales, current demand, complete landed cost, realistic sell-through, markdowns, returns, timing and projected ending inventory. Use a slower-sales case before finalizing the order.
What is sell-through?
Sell-through is the portion of available inventory sold during a defined period. Retailers should measure it by important SKU or category because an overall store percentage can hide slow-moving products.
Why is landed cost important?
Landed cost includes more than the supplier price. Freight, duties, insurance, packaging, handling and related costs affect how much cash the order requires and the margin that remains after sale.
Does a holiday sales forecast guarantee that a funding payment will fit?
No. Forecasts are estimates and actual sales, returns, costs and timing can differ. Test the exact proposed payment against slower sales, delayed collections and higher costs before signing.
