# What are the rules for a Seasonal CAPLine?

**Short answer:** You need at least 12 calendar months of operations and a definite seasonal pattern. Proceeds can finance only seasonal increases in receivables and inventory, and sometimes related labor (SOP 50 10 8.1, Sec. B, Ch. 4, Para. A.3).

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Last checked: 2026-11-08

A Seasonal CAPLine requires at least 12 calendar months of operations and a definite pattern of seasonal activity (SOP 50 10 8.1, Sec. B, Ch. 4, Para. A.3.a).

## What it can finance

Proceeds must be used solely for seasonal increases in accounts receivable and inventory, or in some cases the related labor costs (Para. A.3.b).

## What it cannot finance

- Keeping the business running through slow periods.
- Refinancing existing debt.

## How draws and repayment work

- Funds go out during the seasonal build-up, when cash needs exceed receipts (Para. F).
- The final draw should leave time to turn the money back into cash before a 30-day clean-up period or maturity.
- Principal must be repaid as soon as you receive the cash from seasonal sales.
- Interest should be paid monthly.

## Size and paperwork

The loan amount is based on cash flow projections and should match the cost of the seasonal build-up (Para. B.1.e). The lender must get month-by-month history showing the seasonal need, plus your month-to-month cash flow projection for the next 12 months (Appendix 20, Para. B.5).

A single-transaction line should have a maturity tied to the seasonal cycle (Appendix 17, Para. B.5). If the lender uses borrowing base certificates, you must submit them at least monthly (Para. F).

## Sources

- [SOP 50 10 8.1, Sec. B, Ch. 4, Paras. A.3 (Para. A begins p. 144), B.1 (p. 147) and F (p. 154)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Appendix 20, Para. B.5 (Para. B begins p. 419)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Appendix 17, Para. B.5 (Para. B begins p. 391)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)