# Skip Payment Programs Explained Canonical URL: https://fundmyequipment.com/learn/skip-payment-programs/ Last modified: 2026-05-29T19:39:17+00:00 Type: efin_guide ## Summary Skip Payment Programs Explained. Comprehensive guide. ## Content Skip payment programs let seasonal businesses skip 1 to 3 months of payments each year during off-season. Common in agriculture, landscaping, snow removal, and tourism-dependent industries. How skip payments work The lender pre-defines which months you will not make payments. Common patterns: Agriculture: Skip January, February, March; pay April through December Landscaping: Skip December, January, February Snow removal: Skip June, July, August Marine and tourism: Skip November through February The total number of payments does not change. If you have a 60-month loan and skip 3 months per year, you still pay 60 payments but spread across 75 months. The maturity date extends to absorb the skipped months. How it differs from deferred payment Deferred payment shifts the start of payments. Skip payment shifts specific months every year. Deferred is one-time; skip is recurring. FeatureDeferredSkip When appliedBeginning of loan onlySpecific months each year Recurring?No, one-timeYes, every year Typical useRamp-up, contract timingSeasonal revenue cycles Pricing impactSlight monthly increaseSlightly higher rate or longer term The math On a $150,000 loan at 9% APR with 60 nominal months and 3 skip months per year, the lender either: Extends the term to 75 months total (60 paying months + 15 skip months) and keeps the payment the same, or Keeps the term at 60 months total (so paying months are 45) and increases each payment by roughly 33% to compress 60 months of principal-and-interest into 45 Most lenders use the extended-term approach. Confirm which structure the lender is offering. Eligibility Skip payment programs are generally available for: Businesses with 2+ years operating in a documented seasonal industry Revenue history showing clear off-season pattern A or B credit tier Equipment used primarily for seasonal work (snowplows, tractors, irrigation, harvesters) Year-round businesses typically do not qualify even if they want the cash-flow benefit. The lender wants to see that the skip months align with documented revenue gaps. Documentation needed To support a skip payment structure, lenders often request: Two years of monthly revenue data Business description confirming seasonal nature Sometimes industry-specific documentation (state crop reports, snow event records, tourism season dates) What can go wrong Skip months are fixed and inflexible. If your business cycle shifts (new contracts, geographic expansion, climate variation), the skip months may not align with reality. You cannot rearrange them mid-term in most agreements. Payment shock at season start. Coming out of three skip months, the first paying month feels heavy. Plan cash for that month carefully. Total cost is slightly higher than a standard term. The lender is taking on more cash-flow risk. They price for it. Refinancing is harder. A loan with embedded skip months is structured differently from a standard amortization. Refinancing into a non-skip structure may require resetting the schedule. Industries where it works well Agriculture: planting, harvest, and dormant seasons Landscaping: spring through fall paying season Snow removal: November through March paying season Marine, boat repair, dock services Recreational and tourism operators School-bus contractors How to request it Note your seasonal pattern on the application. Specify which months you want to skip. Provide documentation that supports the request. Apply here and mention seasonal payment scheduling in the notes. Alternative: standard term with savings buffer Some operators prefer a standard amortization and build a savings buffer during paying months to cover off-season payments. This approach: Costs less over the full term (no skip-payment premium) Requires discipline to set aside the savings Gives you flexibility if cash flow changes year to year For businesses with consistent seasonality and limited cash-management bandwidth, skip payments make sense. For businesses with stronger cash discipline, the buffer approach is often cheaper.