Autumn cash flow gaps: 5 ways SMEs can prepare for seasonal slowdowns

For many businesses, Autumn is when cash flow gets tricky. Sales can dip after the summer rush. Customers can take longer to pay, and costs like heating or stockpiling start to add up. If you’re not ready, those gaps can leave you short on funds.

But with a bit of planning, you could avoid the autumn cash flow crunch altogether. Whether you’re bracing for quieter months or just want to stay on top of your finances, these steps will help you prepare. And if you need extra support, invoice finance and working capital finance can bridge the gaps when your own cash flow isn’t enough.

In this article, we’ll explain what cash flow is, why Autumn can cause gaps in cash flow, and how to prepare for the seasonal slowdown.

Key points:

• Autumn can bring slower payments, higher costs, and lower sales – all of which squeeze your cash flow

• Forecasting and planning now could save you stress (and money) later

• Funding Options by Tide can help when optimisation of working capital isn’t enough, offering access to business finance up to £20 million

What is cash flow?

Cash flow is the money moving in and out of your business, from when it arrives and when you need to spend it. If your customers pay you 60 days after you deliver a product, but your suppliers want payment in 30, you’ve got a cash flow gap. And if that gap gets too wide, even a profitable business can run into trouble.

For most small businesses, cash flow is a daily challenge. You might have plenty of sales in the pipeline, but if the money isn’t in your account when bills are due, you’re still in a tight spot. That’s why managing cash flow is about timing, planning, and making sure you’ve always got enough in the bank to cover what’s coming up.

Why might there be cash flow gaps in autumn?

Autumn can hit businesses in a few key ways. First, there’s the post-summer slump – after months of holidays and outdoor spending, many customers start to tighten their belts. Retailers, hospitality businesses, and even some B2B services often see sales drop as people focus on back-to-school or saving for Christmas.

Then there are increased costs. Heating bills can be high. You might need to stockpile inventory for the winter, and if you’re in construction or outdoor work, bad weather can delay projects (and payments). And because it’s a difficult time of year for many people and businesses, customers can take longer to settle their invoices. In fact, 77% of UK SMEs are currently owed money by late-paying customers – and those with 10 or more employees are owed £18k-£22K in unpaid invoices. That’s cash they’ve earned but can’t use yet.

But the biggest issue isn’t just the drop in income or the increase in costs. It’s that they happen at the same time. So you’re paying out more just as the money is coming in slower. And if you’re not prepared, that double whammy can leave you short.

5 ways to prepare for seasonal slowdowns

1. Forecast your cash flow before the crunch hits

A good forecast depends on planning well. You can start by looking at your sales from last autumn. When did they dip? By how much? Then factor in any new costs, like higher energy bills or extra stock you’ll need. And don’t forget to account for slower payments. If your customers usually take 30 days to pay but stretched it to 45 last autumn, build that delay into your numbers.

It’s impossible to predict the future perfectly. But forecasting can help spot potential gaps early so you can do something about them. For example, you might see that you’ll be short in November and can arrange a temporary overdraft now. Or you’ll realise you need to chase invoices harder in October. Either way, you’ll be in more control and shouldn’t be scrambling at the last minute.

If you’re not sure where to start, read our guide on how to create an accurate cash flow forecast for your business.

2. Speed up your cash inflows

The faster you get paid, the less you’ll need to rely on borrowing. So try to make it as easy as possible for customers to pay you.

• Send invoices the day you deliver a product or service, not a week later

• Offer multiple payment methods, like bank transfer or card

• Use automated reminders for overdue invoices – a polite nudge a day or two after the due date can get you paid faster

If late payments are an ongoing problem, you could consider invoice finance. It lets you unlock up to 90% of an invoice’s value as soon as you raise it, so you’re not waiting 30, 60, or even 90 days for the cash. It’s not free, but neither is the stress of wondering when you’ll get paid.

And if you’ve got regular late payers, it might be time to renegotiate terms. Could you offer a small discount for early payment? Or switch problematic customers to upfront payments? Even a 5% discount for payment within seven days could be worth it if it means you’ve got cash in the bank when you need it.

3. Build a cash buffer now

The best time to save for a quiet period is when business is good. If you’ve had a strong summer, set aside a portion of those profits as a buffer. Aim for enough to cover at least a month’s worth of essential costs – rent, wages, key supplier payments, etc. That way, if sales dip or a big customer pays late, you’ve got some breathing room.

If you don’t have savings to fall back on, look at ways to free up cash. Could you sell off old stock at a discount? Or delay non-essential purchases until the new year?

And if you do need to borrow, working capital finance could help. It’s designed for exactly this kind of situation – bridging the gap between what you’ve earned and what you’ve actually got in the bank.

4. Diversify your revenue streams

Relying on one product, service, or season is risky. If that’s your business, autumn is the perfect time to test something new. Could you offer a winter version of your best seller? Or bundle products together for a limited-time deal? Even a small side income can make a big difference when your main revenue slows down.

Look at what your customers need in autumn and winter. For example, if you run a cafe, that might include hot drinks and comfort food. Or if you’re a retailer, it could be gifts or early Christmas shopping deals.

Partnerships can help, too. Consider teaming up with a complementary business to offer joint promotions. For example, a florist and a chocolatier could create a ‘date night’ package. You both reach new customers, and the extra sales can smooth out the seasonal dips.

5. Line up financing before you need it

If you wait until you’re desperate for cash, you’ll likely pay more for it. So if you think you might need funding, start looking now. Compare options like business loans, overdrafts, or revenue-based finance to see what fits your business best.

Revenue-based finance can be a particularly good option if your income fluctuates. You repay a percentage of your sales, so if autumn’s slow, your repayments drop too. That takes the pressure off. Overdrafts are more flexible but can be expensive, so they’re best for short-term gaps. And if you’ve got unpaid invoices piling up, invoice finance could unlock that cash quickly.

Lenders are more likely to say yes when your business is stable, so the key is to apply before you’re in trouble.

Find business finance with Funding Options by Tide

Whether you’re looking for a standard business loan, a short-term business loan, or something a little more specialist, like auction finance for property developers, we’re one of the leading names in business finance in the UK, having helped facilitate over £1 billion in finance to more than 20,000 customers.

Checking if you’re eligible is free, only takes a few minutes, and while a full application would impact your personal or business credit score, checking eligibility won’t. Just submit your details via the link below to find out if you could be eligible to borrow up to £20 million.

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FAQs

What’s the fastest way to improve cash flow before autumn?

Quick ways to improve cash flow include chasing overdue invoices (even a few paid early can make a difference) and looking at cutting non-essential costs (eg subscriptions you don’t use or marketing that isn’t working). If you’ve got stock that’s not selling, discount it to free up cash. And if you still need a boost, short-term finance can bridge the gap.

How do I negotiate better payment terms with suppliers?

To improve your chances, be upfront about your cash flow challenges. Many suppliers will extend terms if you ask, especially if you’ve been a good customer. You could offer to pay a bit more per order in exchange for longer to pay, or ask if they’ll match your payment schedule to your income.

What if my business is too new for traditional financing?

You’ve still got options. Look into government-backed startup loans, or explore revenue-based finance, which focuses on your sales rather than your credit history. Some lenders also offer microloans for newer businesses. And don’t overlook grants – there are often local or industry-specific schemes for new ventures.

Can I use a business credit card for cash flow gaps?

You can, but it can be expensive if you miss any repayments. Credit cards often have high interest rates, so they’re best for short-term gaps you know you can pay off quickly. Another option might be a revolving credit facility, which gives you flexible access to cash at a lower cost.

How do I forecast cash flow with no historical data?

You could use industry benchmarks as a starting point. Talk to other business owners in your sector, too – how do their sales change in autumn? Then adjust for your own situation.

Is it too late to prepare if autumn’s already started?

Not at all. Start by chasing every overdue invoice – every pound counts. Then look at where you can cut costs or bring in cash fast, like selling old stock or pausing non-essential spending. If you need to borrow, short-term loans or invoice finance could still help. The sooner you act, the easier it’s likely to be.

Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.