Slim DC-link PWM (AC) drives for lowperformance applications are emerging on the market. Such drives equipped with a small DC-link capacitance exhibit instability tendencies, if installed on a soft line, giving a degraded performance. The total harmonic distortion (THD) and the partially weighted harmonic distortion (PWHD) of the line current are degraded, if resonance between the line impedance and the DC-link capacitance occurs. Likewise, the motor performance is affected negatively giving extra torque ripple, vibration and acoustic-noise emission. This paper proposes a novel DC-link compensation method, which ensures the stability of the slim DC-link on a soft grid. The proposed compensation method may be used for open- and closedloop control schemes, requiring a small overhead in the digital implementation.