Seasonal facility

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-01

// THE SHORT ANSWER

A seasonal facility funds a cash need that builds and unwinds once a year — stock bought ahead of a retail peak, a dairy farm's costs before the milk is paid for — and is expected to come back down as the season's sales are collected. A bank sizes it against the season's proven peak rather than a forecast of a better one, and checks each year that it returns to its low point, often through a clean-down. A seasonal line that no longer comes down has stopped being seasonal.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.