Free editorial. No brand paid for this article. This is general information, not legal, tax or financial advice.
Many toy manufacturers do not get into trouble because the line failed. They get into trouble because cash left the company to pay a factory long before a retailer paid the invoice.
That gap is built into the calendar. Holiday goods have to be designed, tooled, produced and shipped in time to reach stores for the fall selling season. Factories often want a deposit before they start, and then payment on a shorter clock than the store’s. After the shipment arrives, the retailer is billed, and payment may not come until weeks later — sometimes in the winter, after the goods are already on the shelf.
The work of running the company, then, is to treat that lag as a number you can plan, not as a surprise that arrives in October.
What a 12-month cash map looks like
You do not need a perfect forecast. You need one sheet that answers four questions for each major order or production run:
- When does cash go out (deposits, balance payments, freight, duties, testing, and any sales-rep commissions)?
- When does the product have to leave the factory to arrive on time?
- When will you invoice the customer?
- When is that invoice realistically paid, not just when it is due?
Put those dates on a 12-month calendar for 2027. If you sell into the holidays, work backward from the store’s required on-shelf or on-dock date, not forward from the day you wish the factory could start. Add time for production, inland trucking to the port, ocean transit, customs release, and delivery to a warehouse or to the retailer. Then add the payment terms you actually have in writing — and a buffer for the invoices that arrive late.
A simple illustration, not an industry average: suppose a factory invoice is $50,000, you pay a 30 percent deposit in April and the balance before the goods sail in July, and you invoice a retailer $90,000 in September on terms that, in practice, clear in November or December. For several months the company is funding materials, freight and overhead with no cash coming in from that order. If two or three of those orders overlap, the hole is larger than any one of them suggests.
Write your own numbers in. The point of the example is the shape of the gap, not the dollar amounts.
What official data says about the pressure
You are not imagining that costs and credit have gotten harder to manage.
The Federal Reserve Banks’ 2026 Report on Employer Firms, based on the 2025 Small Business Credit Survey (fielded September 3 to November 14, 2025, among 6,525 small employer firms), found that rising costs of goods, services and wages were the most common financial challenge in the prior 12 months. More than four in 10 firms reported that increased costs associated with tariffs were a financial challenge. Seventy-seven percent of firms reported one or both of those challenges. Tariff-related cost challenges were most common in retail (69 percent) and manufacturing (62 percent).
Among firms that applied for financing, the most common reason was to meet operating expenses (56 percent), ahead of expansion (46 percent). Sixty percent of firms that borrowed from online lenders said the actual borrowing costs were higher than they had expected, compared with 37 percent at small banks and 32 percent at large banks.
Those figures cover small employer firms across industries, not toy manufacturers alone. They still describe the same squeeze: costs up, cash needed for day-to-day operations, and a good reason to read the fine print on any fast, online offer.
Five practical ways to shorten the gap
1. Sell something that is not only a holiday item. Spring birthdays, summer travel, back-to-school and evergreen play patterns (construction, role-play, sensory, classic games) bring in orders in months when a holiday-only line is quiet. Those orders will not erase a large Q4 production bill, but they can keep cash moving while you wait on seasonal invoices.
2. Get terms in writing, on both sides, before you accept the order. Know the deposit and the balance due to the factory, who pays freight and duties, and the retailer’s actual payment terms. If a large account pays slowly, do not plan as if it pays quickly. A smaller specialty order that pays on a shorter clock can be worth more in cash than a bigger invoice that lands in January.
3. Put a working-capital facility in place before you need it. The U.S. Small Business Administration’s 7(a) program is its primary loan-guarantee program for small businesses. It can be used for short- and long-term working capital, among other purposes, with a maximum loan amount of $5 million. SBA also describes a 7(a) Working Capital Pilot: a monitored line of credit, also up to $5 million, with a maximum maturity of 60 months, aimed at businesses (including manufacturers and wholesalers) that have at least one year of operating history and can produce timely financial statements, receivables and payables agings, and inventory reports. The pilot is designed for firms that need to fulfill large contracts or borrow against receivables or inventory.
You apply through a lender, not through SBA itself. SBA’s Lender Match tool asks a short set of questions and, within two business days, gives you a list of participating lenders that express interest. Using it is not a loan application and does not guarantee an offer. Compare rates, fees, prepayment rules and how the lender can demand repayment before you sign.
4. Know the difference between a purchase-order facility, invoice factoring and a cash advance. A purchase-order facility is built around a confirmed customer order: the finance company typically pays the supplier, and is repaid when the customer pays. Invoice factoring advances cash against an invoice you have already issued. A merchant cash advance or similar online product is usually repaid from future sales or deposits and can be expensive.
This article does not quote typical fees, because those offers vary and unofficial rate cards go stale. Get the cost in writing for your actual order, and compare it with a bank or SBA-backed line. The Federal Reserve survey above is the caution: most firms that borrowed from online lenders found the cost higher than they expected.
5. Do not wait until the deposit is due to start the conversation. Lenders ask for a business plan or a clear use of funds, financial statements, and often a personal guarantee or collateral. That package takes time. If 2027 holiday production will need a deposit in the spring, the time to talk to a lender is now, not the week the factory wants a wire.
A planning checklist for 2027
- Build one calendar that shows, for each significant product or customer, the deposit date, the ship date, the invoice date and the expected payment date.
- Separate “holiday-only” cash from “year-round” cash so a quiet spring is visible while there is still time to fill it.
- Confirm payment terms in the purchase order or contract, not in a conversation.
- Price freight, duties and testing as cash outflows, not as afterthoughts. (A companion article in this section covers landed cost and official U.S. Customs fees.)
- Decide, in writing, how much of a large order you can fund yourself and how much, if any, you will finance.
- If you will seek an SBA-backed or bank line, start Lender Match or a local lender conversation before the factory deposit is on the calendar.
- Keep a buyer-facing path open in the off-season, so a specialty store, school or museum shop that buys in March can still find you.
That last item is easy to skip when you are staring at a production invoice. It is also how a company stops being only a Q4 business.
Get found when buyers are not in a holiday rush
Independent and specialty buyers, and institutional accounts such as schools, daycares and museum shops, place orders outside the holiday peak. A ToyDirectory listing is built for those buyers. Starter plans begin at $29 a month or $295 a year, with no setup fee, and the listing goes live within three business days after we have both your payment and your product photos and details.
TDmonthly ToyShow 2027 puts four products in front of those buyers for 120 days. The live price is $590. If you want a preview of how your booth would look, email [email protected] or call 424-272-6854.
We are also preparing a printable 2027 cash-flow calendar for toy manufacturers, as a companion to this article. If you want it when it is ready, use the same email address and put “2027 cash-flow calendar” in the subject line.
This article is for general information. It is not legal, tax or financial advice. Loan eligibility, rates and fees are set by lenders. Confirm current SBA program rules, and your own contract terms, before you rely on them.
Sources
- Federal Reserve Banks, “2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey,” March 3, 2026 (DOI: 10.55350/sbcs-20260303)
- U.S. Small Business Administration, 7(a) loans
- U.S. Small Business Administration, Lender Match
- ToyDirectory.com, Get Listed (prices checked November 14, 2026)
- TDmonthly, ToyShow 2027 information on the ToyShow page and Advertise (prices checked November 14, 2026)
Writer's Bio: Laura N. Larsson covers toy news and trends for TDmonthly. She follows new launches, licensing deals and what retailers are putting on shelves, and she talks with toy manufacturers and store buyers about what is actually selling. Her roundups aim to give retailers, manufacturers and inventors a quick, practical read on where the toy business is heading, with links to the companies and products behind each story. 
