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Tight cash flow? Fix it with Barter

We all need cash to run our businesses

Unfortunately many small to midsize businesses go through periods where cash flow is tight.  Sometimes it is just a seasonal dip, an unexpected expense, or a customer delaying payment on a large invoice.  Other times it is more systemic to the business you are in, and a larger change needs to occur in order for you to advance.  In either case, barter can help you find your way!

 

If you are having difficulty getting past some payables (be they to a primary supplier / landlord or another vendor) and clearing the debt would enable to run your business more effectively and profitably, then consider the following opportunity. 

 

For this to work it is assumed that you either already have enough TRADEdollars to satisfy the debt, or will be able to earn them quickly (e.g. selling a stock of paid up inventory).

HOW TO CLEAR DEBT USING BARTER

 

1)      Contact your broker and share some details (at least the supplier and the approximate amount).  Next, determine who will be making the first approach to the creditor. Note that calling the creditor first gives you  the opportunity to present a possible solution and make it clear that you are trying to act in good faith.  In the case where the BarterPay representative is calling first, you should still contact the supplier to vouch that BarterPay is speaking to them on your behalf.

 

2)      The vendor would be signed on as a member of BarterPay if not already a member.

 

3)      TRADEdollars you currently have would be paid against the debt (fees due prior to transfer).

 

4)      Additional business would be sent to you to settle the remainder of the debt (within a short period of time).

 

5)      The remaining debt would be settled in TRADEdollars (fees due prior to transfer).

 

The creditors may request or you might suggest a premium of 10-20% be paid to convert existing cash debt to TRADEdollars.  (e.g. to convert a $10,000 loan to trade they want an additional T$1,000).  Alternatively, some creditors are only willing to discussTRADEdollar payment as long as a % is paid in CDN dollars. (e.g. settlement is $2,000 and T$8,000 with the $2,000 due immediately).  It is a good idea to discuss this ahead of time with your broker and decide if you want to offer an incentive to convert the debt.  In order to make this determination, you would have to look at your cost of goods sold and the positive effect of getting the debt cleared.  It may not be necessary at all.  The creditor might be content with being paid the original debt full trade.  However, offering the incentive may help to advance the business relationship.

 

Additional benefits of clearing up past debt in barter:

 

1.  You no longer avoid phone calls, some people when they get behind avoid answering the phone - missing out on potential customers.

 

2.  you're able to continue using your preferred supplier - often times business owners in a bind will move to using credit with a secondary supplier rather than finding a way to settle and move forward with the primary supplier.

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