Cash Flow Strategies for Your Business to Survive During a Recession

Md. Meher Ullah • October 14, 2022 • 9 mins read

The term “recession” can hold different meanings to different industry experts or business professionals. Some believe that during a season of recession, businesses will experience a complete loss and operations will shut down permanently.

Others believe that recession is ultimately a small test to their businesses’ survivability, and once they’ve overcome this period, their business will flourish and may come back stronger than ever. This can only be obtained by those who plan well and are ready to take small risks for the longer haul.

  1. The Key to Surviving
  2. Recession is not a threat, but an opportunity
  3. Cash flow issues during a recession
  4. Financing solutions are catalyst to your success
  5. How we can help

The Key to Surviving

The secret to surviving long term and overcoming periods of economic hardship is to manage your cash flow. Oftentimes, business owners may think that the right thing to do is to cut back on marketing and unimportant costs. What they fail to realize is that their competitors are also cutting back on their marketing efforts, making it a competitive advantage that they missed out.

The better way to avoid becoming a victim of recession, is to always prepare in advance and manage your cash flow to react to these seasons and provide essential services your business needs to stay alive.

Recession is not a threat, but an opportunity

Remember when your lecturer from university said, “as long as there is a market for your products or services, your business will survive”? That is especially true when it comes to helping you understand that, a recession does not necessarily mean pulling back on your business, but an opportunity for you to capitalize on the demands for what your business has to offer and how your competitors are losing market presence while they panic and cut costs.

The company that is most successful in strengthening their market presence while the rest backs off during a recession will be the one that can last the longest. When the recession is coming to an end, that company will be able to see the significant changes and benefits they have received while fighting through the season.

Besides marketing itself, product development is also an aspect where most businesses would cut back when facing a recession. No one ever knows when a recession will end. Therefore, it's crucial to strive to strengthen your company's brand by introducing new products at a time when the competition is scrambling to increase sales of their older products. You can use this time as an opportunity to grow, as long as you have the financial stability and cash flow to allow your business to stay ahead of the competition.

Cash flow issues during a recession

The hard truth is that your order volume will be drastically reduced during a recession, which is only natural. But what really affects your business are the past due invoices. Due to the recession, the amount of invoiced sales have dropped, causing your business to struggle with the past due invoices. Without funds to fuel your business, you will not be able to move forward, and the banks will not be willing to help either.

Banks typically cut back on loans and credit lines during a recession. The lack of lending and how it was hurting small businesses was one of the most prevalent themes throughout the 2008 crisis. However, you may find a means to guarantee the cash flow you require and avoid the issues associated with bank financing in a recession in your bid to stay ahead of the competition. Your business will continue to use this option after the recession in order to maintain its competitive edge at all times.

Financing solutions are catalyst to your success

It is crucial to find a strategy to collect on your bills on or before the due dates if you want to maintain a healthy cash flow during a recession. You could try to squeeze your clients for those funds, but you don't want to lose or disrespect them because they are an important resource in a recession.

So what else can you do? The correct answer is to partner with a financier that will advance you the money you require to keep your business operating even during difficult economic times by using your invoices as collateral.

You have the resources you need to ensure a steady cash flow as long as you have valid invoices made out to creditworthy customers. Past-due invoices become even more significant during a recession and become a challenge that the majority of businesses find difficult to solve. When the competition is most weak, financing options will help you outperform them by turning your unpaid invoices into cash.

How we can help

As we’ve mentioned above, having a healthy cash flow is the key to helping your business survive during a recession, and to do that you’ll have to connect with the right and reliable financial partner. iLending comes with years of professionalism and working experiences with companies from different industries. We are here to understand your issues, and provide solutions that will help you be prepared for any economic downturn and to achieve your goals.

October 17, 2022 • 9 mins read
October 17, 2022 • 9 mins read