Overadvance

You run a company that makes tree cozies: padded coverings to put on trees so that people can hug them without hurting themselves. You expect a big bump in sales for Arbor Day. However, you can’t afford the materials to produce extra product for the holiday.

Time for an overadvance. It's a loan that allows you to get the materials you need to fill your expected rush in orders. An overadvance exists as a form of short-term commercial loan. The goal of the money is to build up inventory in anticipation for a sales jump. Your tree cozy business has Arbor Day. Candy companies have Halloween. Lots of places see a sales spike for Christmas.

An overadvance loan typically has an extremely short term, no more than a year. The point is to build up inventory, which you expect to sell relatively quickly...so you should have the cash in hand to pay the loan back relatively quickly.