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We live in uncertain times. There are wars between Ukraine and Russia, Israel and Hamas, and hotspots elsewhere like in the South China Sea. The price of crude oil occasionally threatens to spike above $100 per barrel. The U.S. national debt is now at $34 trillion and growing. Analysts and economists are still unsure if we are headed towards a hard or soft landing, and so on.

People are still unsure about more interest rate hikes from the Fed. The likelihood they will at least hold steady at the current rates and not go lower is still quite high. Many families are drowning in bills because of higher mortgage and rent rates, car loans, business loans and student loans.

These scenarios make ordinary small business entrepreneurs wonder what might happen to them in these dire scenarios, regardless of whether they are B2B or B2C businesses.

Related: I’m an Economist — You Need to Ask These Questions About Your Business as You Look Toward 2024.

Debt is expensive and hard to get

Getting debt is difficult for many small companies. Short term, banks use the overnight lending rate. For long-term projects, lenders use the U.S. 10-year bond as one basis for a minimum expected return. The U.S. government is considered an iron-clad borrower, meaning it will not default. If the U.S. promises 5% on the 10-year bond, a proposed project needs to promise a return that is much better than that, given the risk the lender will be taking.

After all, why would anyone want to fund a project if they can just sit peacefully with a bond that yields around 5% or more a year for several years without risk? Borrowing money these days is more expensive and risk-averse.

Your company treasury should be positioned correctly

To prepare for any eventuality, small business owners are wondering where to safely park their money. They cannot run out of cash for salaries, operations and maintenance, even if expansion plans may be shelved for the moment for many. The money they immediately need for the near future will likely remain in cash (or cash instruments) to be liquid. But for future expenditures, assuming they have enough savings, the money for that should ideally earn some interest or grow in value.

Your company treasury needs to be positioned correctly. Maybe the U.S. won’t have as large a GDP growth as in previous years (except for certain sectors like defense), but as long as your portfolios and corporate treasuries survive and keep you afloat, maybe you can make it through the downturn.

Related: How to Navigate the Volatile Business-Funding Environment

How should company treasuries position themselves?

Each company and business should decide, based on their present and future cash needs, how to position their treasuries so they do not run out of cash at any time for salaries, operations and maintenance at least, and maximize tax benefits.

The stock market, particularly the big tech Magnificent Seven (Nvidia, Microsoft, Amazon, Apple, Meta, Tesla and Google), is still okay but the rest of the S&P 500 is just being pulled up by these seven stocks. The Russell 2000 small cap index is not doing well, as these small cap stocks (with some exceptions of course) are the first to be affected by poor economic conditions.

So if you are thinking of putting some of your company money in stocks, watch out. If a recession (a hard landing) does hit us, stocks whose revenues are based on consumer and business discretionary spending will get hit hard. For example, even if consumers want the latest iPhone on the market, if they don’t have the money to buy it, they won’t. That would impact Apple’s (and other tech stocks) Price to Earnings (P/E) ratio, thus many tech stock share prices may take a dive.

For those who want to still hold stocks try to get defensive stocks that are relatively unaffected by recession risks such as healthcare and energy, especially if those pay a dividend.

Many companies have assets in equipment, factories, office space, intellectual property, real estate and others. If your company gets into a cash crunch, you can sell some of those assets. Depending on your revenue outlook and cash position, you may want to either pay off any outstanding debts or refinance for a longer payment period but at a higher interest rate.

Related: You Must Understand This Crucial Retirement Benefit If You Want Your Money to Withstand Inflation — Whether You’re 25 or 75

Because of the uncertainties mentioned previously, many companies are holding higher positions in cash instruments than they would normally do during the pre-Fed hike years. Short-term U.S. treasury bills and notes are more preferable to long-duration treasury bills, unless you are pretty sure you can hold those long-duration bonds to full maturity and not sell those prematurely.

For those holding bonds, watch out for duration risk like what happened to Silicon Valley Bank. Their bank management decided to put much of their money in long-duration U.S. treasury bonds. If they could have held these to maturity it would not have been an issue. However, because their depositors wanted to cash out en masse, they were forced to sell these bonds before maturity. Because newer higher-yielding bonds are worth more on the market, the bank was forced to declare that their asset values had fallen, hence their bank share price dove down sharply.

If you are comfortable with it, Bitcoin is one option once the SEC approves the ETF, but keep the percentage in your portfolio to a minimum just to enjoy the upside without too much risk. Gold and silver are also options, particularly if our financial system goes really haywire. These precious metals will at least have some value in any situation.

Small positions in defensive stocks, precious metals, and Bitcoin, are a hedge against the very remote failure of stocks, bonds and the US dollar itself. However, the breakdown of what assets and cash instruments your company should hold depends on your situation, your revenue outlook, and your spending requirements.

Needless to say, let us hope that dire scenarios do not happen but you may need to be prepared for any possibility.