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Peak Season Trade Credit

Flexible Credit Solutions to Meet Your Peak Demand

Many Hong Kong companies see dramatic seasonal swings in their business, from a dip in production during Lunar New Year to a spike in demand just ahead of Christmas. Perhaps you are a travel agency that sees the most in demand for your services during the summer holiday season, or your product targets to a niche market that is only active for a few months a year.


  • Tight cash flow means Hong Kong companies struggle to find working capital during peak trade season
  • American Express’ corporate program provides up to 51 days of credit on purchases made with our cards

Each rise and fall in activity has a closely correlated impact on your cash flow that can make month-to-month operations a nightmare. Manufacturing and shipping products to Europe or North America can take months, which means you may be ordering supplies just when cash flow is at its lowest. Combine that with investing in your growth, meeting unexpected capital costs and coping with an unpredictable foreign exchange market and your company may be facing serious cash flow challenges.

Seasonalities usually impact both your revenues and your costs. You place big orders ahead of peak season, draining your cash reserves, but your payday, when it comes, is significant, pushing aside all cash flow concerns until the next season. These extreme swings in cash flow are detrimental to your company’s long-term growth and operations, and they need to be addressed.

Examine the Trends

The first step is to closely examine your cash flow history and then identify and quantify your seasonal trends. Do some peak seasons hurt your cash flow more than others? How predictable is the timing of these changes? It’s important to have a full picture, with all the metrics you can generate, to find an effective solution. Taking a hard look at the past is often the best way to predict the future.

You must also find internal ways to increase cash flow during your low season, which can be done with discounts to increase sales or incentives to encourage early payment. Look at all the stages of your cash flow, from receivables to payables and inventory, and identify all inefficiencies and potential sources of cash flow.Identify which expenditures can be better timed to more closely match your cash flow seasonalities.

Look at your working capital holistically including all of your finance options, from banks to credit cards, billing cycles to invoice habits. How fast after a sale do you issue your invoice? Just as timing is at the root of your problem, it can also be the source of a solution. Familiarise yourself with the billing terms of your credit cards and your supplier’s billing cycles. Initiatives on adjusting billing cycles, customer terms and prepayment amounts can go a long way to addressing your problems.

Managing your company’s cash flow in a seasonal industry is a task that is just as important when cash flow is high than when it is low. Do not ignore or push this issue aside with a temporary emergency has past. The best time to solve these problems is when you are not under extreme pressure to do so.

Sources of Credit

Bank loans and credit lines can help, but in today’s tight lending market mid-sized companies may struggle to get the help they need from the banking industry. Such facilitates can also take considerable time to arrange, and put a strain on your balance sheet once you have them.

American Express’ corporate program is another solution. We provide up to 51 days of credit on purchases made with our cards, allowing you to stock up on inventory ahead of predicted high demand. We also provide corporates with billing cycle options that can help you juggle seasonal fluctuations in your business.

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