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Business Advice

Top 3 tips to weather economic slumps

January 26, 2023

For the first time in three years, the leading news topic of COVID-19 has taken a back seat to inflation and forewarnings of a recession. Canadian and U.S. reporting varies on when a recession will happen and to what extent. Regardless, businesses and consumers alike have more control over their response to declining market conditions than a global pandemic.

This article outlines how businesses can prepare for a downturn and establish a plan for growth beyond it.

1. Stay focused

To make the best of your business during trying financial times, consider focusing on three main areas:


In a difficult economy, play to your proven strengths. Stick to products and services that have earned profits during better economic times. Control bad debt by keeping a close eye on accounts receivables and high-margin jobs dependent on vendors who might be cash-constrained.

Service and retention

Stay in close touch with your existing customer base. These are the accounts and individuals that helped build your business. Now is the time to prove your willingness to go the extra mile for them. Also, customers and suppliers generally enjoy people with an upbeat outlook, so work to keep yourself and your staff optimistic/

Tip: Consider the value-add of credit unions. They usually offer a full range of banking services. And because they are member-owned, they have a high commitment to business success in the local community.

Cash reserves

Follow up on collecting past due invoices. If necessary, let debtors pay in installments. Small, regular payments are better than none. Preserve bank lines of credit for unexpected expenses and investments that hold value. Instead, use financing to acquire equipment, technology and other eligible assets that have higher depreciation schedules or shorter shelf lives.

Tip: Remember, your assets generate revenue while you pay for them over time with financing. Some financing terms include the option to defer payments for a specified period.

2. Prepare for challenges

To get ready for any upcoming economic changes, conduct a regular, three-step financial analysis of your business. This practice helps keeps you and your staff more organized and your decision-making more nimble.

Know your banker

Make sure you’re in good stead with your bank facility and ensure it is prepared for a downturn. Banks often reduce credit limits as the economy tightens, so ask about any potential policy changes on the horizon and verify that your credit lines can accommodate unexpected expenses and investments. 

Evaluate your real net income

Get an accurate picture of your organization’s true net income. Review updated records and balance sheets with your CFO, controller, accountant, or other financial analyst. In any case, it’s helpful to understand significant incurred expenses and earned revenues during a given year.

Take charge of debt, leverage financing

Avoid owning anything (such as equipment or vehicles) that loses value. Finance it instead. Financing, not ownership, offers more financial advantages. In addition, an experienced equipment financing professional can create plans tailored specifically to your goals and business needs.

Analyze business assets

With rapid changes in market demand and geopolitical events, you never know which of your asset values may change. It’s in your best financial interests to periodically analyze and re-evaluate your business assets. As post-pandemic inventories approach normal levels to normalize, used equipment prices will decrease. Keep an eye on new opportunities to finance either new or used equipment to help grow your business and stay competitive.

Look for sunlight through the clouds

A recession brings positive events, too, so watch for them. For example, some businesses (such as those that specialize in repair and maintenance), will prosper during a recession. Additionally, because a recession lowers asset prices, it opens opportunities for business investors to acquire valuable goods at desirable prices.

Other recession-related financial benefits have the capacity to bring positive impact to businesses. They can include:

Bigger workforces

Economic downturns usually create larger labor pools and lower wages; we might see an increase in skilled staff availability.

Higher productivity

Greater productivity typically results from workers who stay on the job.

Less freight, more margin

Diesel prices are high, so reduced demand for fossil fuels can lower transportation costs and enhance margins.

Meridian OneCap can help keep you steady

Business ventures in Canada and the U.S. offer a distinct set of challenges and opportunities. Whatever the economic climate, an experienced provider of equipment financing backed by credit union serves as a reliable, full-service resource for a broad range of industries and organizations.

For example, Meridian Credit Union specializes in serving small- to medium-sized businesses in construction, transportation, and agriculture. Its subsidiary, Meridian OneCap, offers flexible finance programs for manufacturers, distributors, and dealers.

Economic conditions change, but Meridian holds a steady course concentrated on your success. Because Meridian builds personal relationships with each client, you can depend on them to help you prepare for recessionary market conditions and identify business opportunities, now and in the future.

Explore our lease options and financial services

To discuss lease options and other financial services, please contact David Brydson, VP Retail & Floorplan Programs at 416-888-1170 or

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