Strategic reserve

A strategic reserve is cash held deliberately for opportunities and emergencies, separate from the cash needed to run next month.

Its value is optionality. A business with a reserve can take a large job that needs materials up front, replace a vehicle the week it dies, or wait out a slow quarter. Without one, each of those becomes borrowing at short notice, which is when borrowing is most expensive.

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Last reviewed 2026-07-29

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