Holiday Inventory Funding for Retail and Ecommerce
Short answer: Stores should apply for holiday inventory funding before placing holiday orders, while recent statements show steady sales. Holiday stock is paid for weeks before the rush, so the money needs to land before the orders do.
Cost, credit, speed and stacking
Cost
Credit
Speed
Stacking
Afterfirst MCA runs a marketplace and doesn't fund stores itself. A store applies once, and we pass it to funders with retail programs that match.
How big is the holiday peak for each kind of store?
For most store types, December is the top month and January or February is the bottom.
Each figure sets a month against that store type's own yearly average, with 100 as a typical month, using five years of Census sales.
| Store type | Top month (index) | Low month (index) |
|---|---|---|
| Clothing stores | December: 157.6 | January: 70.7 |
| Sporting goods stores | December: 140.0 | February: 75.9 |
| Beer, wine and liquor stores | December: 131.4 | January: 84.2 |
| Gift, novelty and souvenir stores | October: 146.1 | January: 63.9 |
| Ecommerce and mail-order sellers | December: 128.8 | February: 84.9 |
| General merchandise stores | December: 124.7 | February: 85.3 |
| All retail and food services | December: 112.1 | February: 86.2 |
Method behind the numbers
We started from the Census Bureau's monthly retail sales file, using rows without seasonal adjustment. Each month was divided by its year's monthly mean, and five years were averaged. The sales are Census figures; the ratios are ours.
When does holiday stock have to be paid for?
Stock for the holidays is usually ordered and paid for months before it sells. That timing gap is what holiday inventory funding covers.
| Window | Months | What happens | What statements show |
|---|---|---|---|
| Order and pay deposits | July to September | Orders placed, supplier deposits due | Normal deposits, rising supplier debits |
| Stock arrives | September to October | Balances due, extra staff hired | Supplier and payroll debits peak |
| Selling season | November to December | Most of the year's sales | Deposits at their high |
| Post-holiday low | January to February | Sales drop, returns come back | Deposits at their low |
Gift shops have two peaks
Gift, novelty and souvenir stores show an October peak of 146.1 as well as 131.0 in December. A gift shop may need stock money as early as summer, so the first order is in before October.
Liquor stores and the December month
Beer, wine and liquor stores run close to average most of the year, then jump to 131.4 in December from 104.5 in November. January falls to 84.2. A liquor store's stock order is large and short, so the payment plan matters more than the amount.
Ecommerce sellers and platform payouts
Ecommerce and mail-order sales climb to 116.5 in November and 128.8 in December. Platforms pay out net of fees and reserves, and funders read those payouts, not gross sales. The Ecommerce page covers how.
Planning for January
After the peak, clothing sales fall to 70.7 on the index. A funding firm quoted by an industry news site called this a holiday hangover that lasts until February; that is practitioner opinion. Plan how payments will be covered through the low months before you sign.
Which statements will a funder see from a store?
A funder starts with recent bank statements, and a store's September statements look nothing like its January ones.
This is a practitioner view, not measured data: a funding firm writes that underwriting leans hardest on the three latest statements. For a clothing store applying in September, those months are June to August, at 96.4, 99.0 and 103.5 on our index. That is close to an average stretch, not a slow one.
When funders get busy
Industry news reports, all practitioner accounts, say funding requests for holiday stock bunch up in September and October. An older report says underwriting slows in late November. Another says applications dip in the week before and after major holidays. These are opinions, not data, and no two funders keep the same pace.
Holdback or fixed payment for holiday stock
A holdback takes a share of each day's card sales, so it rises in December and falls in January. A fixed debit stays the same in January, when sales sit at their low. The Holdback guide explains how each is set. For holiday inventory funding with a sharp peak, ask each funder which one its offer uses, and set the offers side by side on the Comparison sheet.
Stores already paying an advance
An open advance doesn't rule a store out. Depending on your file, a Second position, a consolidation, or holding off until the season ends may fit. Name each one in your application.
What the forecasts say
The National Retail Federation forecasts 4.4% growth in retail sales for the year, and it usually issues its holiday forecast in early November. One analyst firm estimates holiday sales growth of 2.5% to 3.5%; that is an estimate, not official data. Census's advance report shows August sales at nonstore retailers up 9.9% from a year earlier, before adjusting for prices.
FAQ
What does holiday inventory funding cost?
You pay back more than you receive, and that difference, plus any fees taken out, is the cost. Funders set their own terms, and our team lists each offer side by side. Applying costs you nothing, and Afterfirst MCA charges you no fee.
Where does credit come into a store's file?
Ask how any credit review works before you sign. Each funder sets its own steps, and our team can put your questions to the funders on your file.
When should a store send its holiday request?
August or September, if you can. That leaves room for funder questions before the fall rush practitioners describe. We can't promise a reply time, since each funder moves at its own pace.
Can a store with an open advance get holiday inventory funding?
Often, yes. Name each open advance in your application, as the payment show on the statements regardless. Options range from a second position to a consolidation to holding off until January.
Should the payment be a holdback or a fixed debit?
It depends on how sharp your peak is and what each funder offers. A holdback follows sales down in January, while a fixed debit doesn't. Compare both on the same sheet before you choose.
Next step
Store owners can Send one application that names each open advance, or Put a timing question to our team first. Retailers can read the Retail page and the Inventory page for more on how funders read store files.
Call 877-FUND-654What does holiday stock funding look like in numbers?
Example: a gift shop deposits $50,000 in a normal month and $95,000 in December. It needs $40,000 of stock in October. An advance of $40,000 at a 1.30 factor pays back $52,000 over 126 business days, about $412.70 a day or $8,667 a month. That's 17.3% of a normal month, 9.1% of December and 24.8% of a $35,000 January. January is the month to test.
Questions owners ask about this
When should a store apply for holiday inventory funding?
Before holiday purchase orders are due, not when the rush starts.
Can ecommerce sellers get holiday funding?
Yes. Funders read platform payouts and bank deposits.
What will a funder look at?
Recent bank statements and steady sales history.
Holdback or fixed payment for holiday stock?
A share of sales follows the holiday peak. A fixed payment can strain January.
How do I plan for January?
Size the advance so payments still fit after the holiday sales end.
Sources
- U.S. Census Bureau Monthly Retail Trade Survey (sales by kind of business, NSA): store sales used for the peak-and-low table.
- U.S. Census Bureau, advance monthly retail and food services sales: nonstore retailers up 9.9% from a year earlier, not adjusted for prices.
- National Retail Federation, annual retail sales forecast: the 4.4% growth forecast and the timing of the holiday forecast.
- The Grayson Company, U.S. Holiday Retail Outlook: analyst estimate of 2.5% to 3.5% holiday sales growth; opinion, not official data.
- DeBanked, Funders prep for the holiday rush: practitioner account of fall demand and a post-holiday slowdown; opinion.
- DeBanked, October kicks off the rush for holiday inventory stock: older practitioner account of an October rush and a late-November slowdown; opinion.
- DeBanked, Funding a deal near the holidays?: an account of fewer applications near holidays; opinion.
- Practitioner commentary: the source for the three-month statement view quoted here; one firm's opinion.
Send one file.
See what fits.
Call 877-FUND-654 with questions.