Seasonality Adjustment
An underwriting adjustment that accounts for a business's predictable seasonal revenue swings, rather than judging affordability off a single average across the whole year.
For a business with a clear seasonal pattern, like landscaping, agriculture, or holiday retail, a straight average of monthly revenue can understate what the business earns in its busy season and overstate what it earns in its slow season.
Lenders familiar with seasonal industries may structure repayment to align with the business’s stronger months, or weigh a longer look-back period, rather than applying a flat underwriting approach built for a business with steady, even revenue.
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