Are You Prepared For a Recession?

“Different industries thrive through different times and circumstances where others may not weather them as well,” said Kevin Duffy, SVP of Sales & Business Development at Channel Partners Capital.

The new interest rate environment and slowing economy could be viewed as a specific circumstance and some experts say we’re on pace to experience a recession. But that might not be all bad, according to some industry veterans. Duffy’s colleague at Channel, Chris Cainion, VP of Sales and Business Development, told deBanked that if things slow up a bit, it could be a opportunity to “work on efficiences within your business.” For those in the funding industry specfically, the Channel colleagues said that it’s a time to leverage your strengths, monitor your portfolio, communicate with your customers, be opportunistic, and manage your liquidity.

“Cash is king as the credit crunch is increasing,” said Eleni Delimpaltadaki Janis, Managing Partner & Chief Investment Officer at Equivico. “Focus on looking at your expenses very carefully, looking at where can we create efficiencies in your balance sheet and reserving cash for the future.”

Recessions tend to separate the really good companies from poor ones, said the folks at Channel, who emphasized that they are among the ones prepared for change or a slowdown.

“It’s important for us to be able to first hone in on a type of industries that are good for this type of climate,” said Duffy. “And then the ones that aren’t, we got to be a little bit more careful. It also gives us a chance to work on other things that make us flow, our app-to-funding or funding-to-conversions and things of that nature that helps us be more competitive and more competent as we progress and starting to pick up business again.”

For Janis, if an eventual recession becomes a crisis, she said to never let a crisis go to waste. “In other words, crisis comes with opportunity in the industry, whether you are a FinTech high growth startup or small business, the reality is that a crisis will end up eliminating some of your competitors, and will bring a spotlight on weaknesses that your company or others may have, and an opportunity for those who are solving real problems and have quality products to stand up and gain market share,” Janis said.