Central Otago WasteBusters is not receiving income for materials usually sold on the recyclables market.
The economic climate, the credit crisis, and the volatility of commodity markets for recyclable materials are being blamed for the company's problems.
Manager Karen Noble said if the Central Otago District Council had not agreed to help the company, its operations would have been compromised.
The CODC is working with WasteBusters to ensure the company maintains its collection of recyclable materials from around the district, as well as its role in educating the community about recycling and the proper disposal of waste.
A short-term strategy being considered is the stockpiling of materials until the recyclable material markets recover.
Mrs Noble did not know how the company would be financially affected in the meantime.
"At this stage, the council's agreed to support us, and further down the track we may know exactly what that will entail. A team of people is meeting each week to discuss what we can do with material, where we can stockpile it, and whether that's the best thing to do," she said.
The news is not all bad, with initiatives being considered to make the most of less consumerism in tight financial times.
"As we feel the pinch, naturally waste generation will reduce. We have never been in a better position to start working on rethinking and redesigning our systems to change our wasteful behaviour," CODC waste minimisation officer Sophie Mander said.
Ms Noble said an ultimate goal would be for people to throw away less material by buying, using, and consequently recycling less.
"We don't want people to stop recycling. New ideas that support better and wiser use of resources will need to be fostered, and we all need to encourage our No 8 wire thinking," she said.
Opportunities existed for entrepreneurial people to propose ways recyclable waste could be used within New Zealand, she said.
Clair Higginson, chairwoman of the Vincent Community Board and CODC infrastructure committee, said the council remained committed to a zero waste and sustainable district in the future.
National's Otago MP, Jacqui Dean, said she would help WasteBusters by raising its problem with the Government, and she hoped the Waste Minimisation Act waste levy could be used to help the company.
Mrs Dean had informally discussed the issue with Conservation Minister Nick Smith and planned to meet him next week.
