Industry Expertise | July 2025 Addressing the financial implications of economic volatility for your business

Across the business landscape, there’s apprehension about the economy and uncertainty about the business conditions ahead. The on-again-off-again tariff announcements and evolving trade policy may have fueled these sentiments, but they’re only one part of the picture as questions continue to swirl around inflation, interest rates, and global conflicts.

That uncertainty pervades environmental services, even in the waste sector, which is more recession-proof than many industries. Some of the factors driving unpredictability can open new opportunities—rising steel and aluminum tariffs have led to higher scrap metal prices that have benefited metal recyclers in some markets. Demand for environmental services has been steady as projects underway continue to progress. Overall, waste and recycling businesses need to stay ahead of disruptive economic trends and prepare for specific risks and shifts that can affect the industry.

Protecting your business means managing financial risk proactively in a volatile economic environment; it’s essential to protect your margins and maintain stability. Look at tactics that can help mitigate exposure to specific financial risks, increase liquidity options, and gain access to additional credit before market conditions tighten.

• Evaluate currency hedges tailored to your specific risks. Identify any natural hedges by looking at the currency flows in and out of your business.
• Consider hedging significant commodities or market prices that are important to your business—scrap metal, bulk recyclables, fuel, etc.—looking at short-term and long-term hedging strategies.
• Review your current access to capital and banking partners. Now may be the optimal time to update or increase your credit revolver to provide more access to capital. A strong financing partner with a robust balance sheet could protect you from the risk of smaller banks or financing sources needing to limit loans and your access to capital during a downturn.

Talk to your Truist relationship manager and our Waste & Environmental Services Industry Specialty team to design the strategies and instruments that fit your business and provide the local support you need to be competitive.

Prepare your business to face an uncertain future by strengthening the company’s financial foundation. Building cash reserves provides extra leeway to carry you through tough times and confers additional flexibility, which could allow you to seize smart opportunities for turning volatile conditions to your advantage.

• Adjust your short-term liquidity strategy. In uncertain times you may want to move reserve cash into the current operating cycle to fulfill its intended purpose. Once the situation stabilizes, you can pull those funds back and continue to follow your business-as-usual liquidity management policy. You also want to revisit your strategy for your long-term reserves, so you ensure you can access them if you need them without being at the mercy of turbulent financial markets.
• Strengthen your peace of mind by setting aside additional operating or reserve funds. Consider reducing or foregoing owner distributions for a few quarters to establish or grow your emergency fund.
• Revisit growth plans, productivity initiatives, and capital investments. Given market volatility, you may want to think about delaying certain initiatives and accelerating other changes that could boost your resilience.
• Assess the possibility of new investments and opportunistic acquisitions with your banker and business advisors. Calculated risk-taking may be warranted as market conditions evolve.