Closing for summer? How to handle business loan repayments over the Christmas shutdown

Your lender doesn’t take three weeks off just because you do. If your business closes over Christmas and New Year, fixed loan repayments carry on. The money comes out whether or not the till is ringing, and in January it lands right on top of holiday pay and an Inland Revenue due date. The good news is that you have options. The catch is that most of them only work if you sort them out before December.

This guide compares the five realistic ways to handle loan repayments over a summer shutdown, what each one costs in dollars and hassle, and when each one makes sense.

Why is the summer shutdown hard on loan repayments?

Three things land at once.

Income stops or slows. A builder, a manufacturer or a professional office might bring in next to nothing for two to three weeks. Even businesses that stay open, like retailers and hospo in holiday towns, often see a quiet patch in early January.

Fixed costs keep going. Rent, insurance, software subscriptions and loan repayments don’t take a break. Employees who take annual leave during a closedown are paid in the usual way, according to Employment New Zealand’s closedown guidance. Public holidays that fall inside the closedown are paid too, on days the employee would normally work.

January is crowded. For a business with a 31 March balance date on the standard or estimation option, the second provisional tax instalment is due on 15 January 2027, per Inland Revenue’s payment dates. Ratio and AIM payers also have an instalment that day. Add the first pay run back and any loan debits caught up after the holidays, and the second week of January can be the tightest of the year. Our provisional tax dates guide has the full calendar.

What do the 2026–27 holidays mean for daily and weekly debits?

This summer’s public holidays fall awkwardly. Per Employment New Zealand:

Holiday	Date	Observed (for most Monday–Friday businesses)
Christmas Day	Friday 25 December 2026	Friday 25 December
Boxing Day	Saturday 26 December 2026	Monday 28 December
New Year’s Day	Friday 1 January 2027	Friday 1 January
Day after New Year’s Day	Saturday 2 January 2027	Monday 4 January

That gives two four-day breaks back to back. If your lender only debits on business days, debits skipped on the holidays may be collected later, sometimes two or three at once on the first business day after. If it debits every calendar day, the money keeps going out all the way through. Either way, ask your lender exactly how it works. Don’t assume.

What are your five options?

Here’s the side-by-side. Every option costs something. The question is which cost suits you.

Option	What it is	Typical cost	Lender agreement needed?	Best for
1. Repayment pause	Lender agrees to stop or cut debits for a set number of weeks	Interest or fees usually keep accruing; term may extend; sometimes a variation fee	Yes, in writing	Businesses with a good repayment history and a clear reopening date
2. Seasonal schedule	Repayments permanently shaped around your year: lower in quiet months, higher in peak ones	Little change to total cost if set up at the start; refinancing to get one costs more	Yes, often a new facility	Businesses that close or dip at the same time every year
3. Sales-linked repayments	A merchant cash advance that takes a share of card takings	Usually one of the dearer forms of finance	Built in	Card-heavy retail and hospo with variable takings
4. Line of credit as a buffer	Draw to cover debits, wages and rent, then repay from February trade	You pay for what you draw and for how long, plus any facility fees	Yes, to set it up	Businesses with recurring seasonal gaps
5. Refinance with a deferred start	Replace the loan with a longer facility whose first repayment falls after the break	Establishment fees and any early repayment cost on the old loan	Yes, new lender or new loan	Owners who also need extra cash, or whose current loan doesn’t fit

There’s a sixth option nobody chooses on purpose: do nothing. Let the debits run and hope the overdraft holds. That can mean dishonour fees, default interest and a black mark with the lender, all in the same week you need goodwill most.

Option 1: Will my lender agree to a repayment pause?

Possibly, if you ask early and come prepared. Lenders are far more open to a short, planned pause than to a string of bounced debits. Bring:

• your closedown dates and the date you reopen;
• a short cash-flow forecast showing debits resuming comfortably from February (business.govt.nz has a simple template);
• your repayment record on this loan;
• a clear ask: for example, “no debits from 21 December to 11 January, with the missed amount spread over the following eight weeks.”

Here’s the trade-off. A pause rarely makes the debt cheaper. Interest usually keeps accruing, and the missed payments have to go somewhere: a longer term, bigger later payments, or a lump sum. Some fast lenders with fixed-fee pricing may agree to defer debits but charge a fee for the change. Ask for the total dollar cost of the loan with and without the pause, and get the new arrangement in writing before 20 December.

Option 2: Should I switch to a seasonal repayment schedule?

If your business shuts every summer, a loan that pretends otherwise will pinch every summer. A seasonal schedule spreads repayments to match your actual year: smaller over the closed weeks, larger in your strong months.

Some lenders build this in when the loan is first written. Getting it on an existing loan usually means a variation or a refinance. Our seasonal dip page covers which fast products tend to allow it. For a broader look at how repayment frequency changes cash flow, see daily, weekly or monthly repayments.

Option 3: Do sales-linked repayments solve the problem?

Partly. A true percentage-of-sales merchant cash advance collects less when card takings fall, so if you take nothing over the break, you repay little or nothing. That’s genuinely useful for a café or shop that closes for a fortnight.

Two cautions. First, not every product sold as “flexible” really flexes. Some take a fixed daily amount worked out from your average sales. Ask what happens to the repayment if takings drop to zero for 14 days. Second, a merchant cash advance is usually one of the dearer forms of finance, and the term simply stretches to make up the closed weeks. It suits card-heavy businesses, not ones paid by invoice.

Option 4: Is a line of credit the simplest fix?

For many seasonal businesses, yes. A business line of credit lets you draw what you need over the break to cover loan debits, rent and holiday pay, then repay as February invoices are paid. You aren’t renegotiating your existing loan, and it’s there again next summer.

Here’s the trade-off. You need to set it up before you need it, and approval takes time. There may be establishment or facility fees even in months you don’t draw. And it takes discipline. If the line never gets cleared in the busy months, it stops being a buffer and becomes permanent debt. Our line of credit vs short-term loan comparison sets out when each one fits.

Not sure which of these suits your business? Tell us about your shutdown and we’ll show you the options.

Option 5: When does refinancing with a deferred start make sense?

When the current loan’s shape is the real problem, or when you need more cash anyway. Replacing several short daily-debit loans with one longer facility that has its first repayment set for February can fix the summer squeeze and lower the weekly outflow all year.

Check the exit cost on the existing loan first. Early repayment fees, or a fixed total cost that doesn’t drop if you repay early, can wipe out the benefit. For property owners, a secured facility can move quickly. Same-day funding for amounts from $20k to $250k is possible with property security, but leave yourself a few weeks’ margin before Christmas, as valuers, lawyers and lenders all run on holiday rosters.

How might this look in practice?

Illustrative example. A joinery workshop in Whanganui closes from 19 December to 11 January. It has an unsecured loan with weekly debits of about $1,800, plus holiday pay for six staff and a provisional tax instalment due on 15 January. Doing nothing, three weekly debits leave the account while nothing comes in, then the first January week carries pay, tax and a debit together.

In October the owner compares three options in dollars. A pause on the existing loan is offered with the three missed payments added to the end of the term and a small variation fee. A line of credit would cover the gap but needs a fresh application and has an annual facility fee. A refinance isn’t worth it, because the current loan has only four months left to run. The owner takes the pause, gets it in writing, and builds a modest January buffer from strong November trade.

The lesson: the “best” option depended on how long the loan had left to run and how much the January squeeze actually totalled, not on which product sounds most flexible.

What should I do between now and December?

1. Map your closed weeks and the first fortnight back, day by day.
2. List every automatic debit: loans, leases, merchant advances, subscriptions.
3. Ask each lender, in writing, how it handles public holidays and whether it offers a pause or seasonal schedule.
4. Price each option in dollars, including doing nothing and running into overdraft.
5. Check payroll timing, including holiday pay and the first pay run back. Our page on covering payroll can help if wages are the pressure point.
6. Lock it in before 20 December, because many lenders and advisers run on skeleton staff after that.

Still weighing up products? Our fast funding comparer ranks the options for your situation in about a minute.

Get the summer sorted before the doors close

Closing for summer is something your business has earned. The last thing you want is to spend the break watching your bank app. If your current loan doesn’t fit a business that closes each year, or you’d like a buffer for January, we look at how your year actually runs before we suggest anything.

The enquiry takes about a minute and there’s no credit check when you first get in touch. There’s no spray-and-pray either: we won’t send your details to a pile of lenders, so you won’t be fielding calls from strangers over Christmas. A real person reads your situation, including your closedown dates and existing debits, and rings you back. Please fill in the form accurately, especially your turnover and current repayments, so the first option we bring you is one that fits.

See if you qualify →