Is there a problem that can be addressed through barter exchanges? Absolutely! Excerpts from a recent article written by Adam O'Daniel, staff writer for the Charlotte Business Journal reveal a growing problem faced by most entrepreneurial companies. In his article entitled "Tough credit-card terms put small firms in a bind", (June 12, 2009), O'Daniel writes, "Small-business owners are growing increasingly frustrated with the changing rules attached to their credit cards.
In the past six months, 75% of small-business owners say their credit-card terms have become more stringent, according to a new survey by the National Small Business Association. About 33% of business owners report their card's credit limit has been cut and 63% report their interest rates have increased.
It's cause for concern for small-business owners who often use credit cards to make day-to-day purchases. The NSBA says 59% of small businesses report using credit cards to finance their operations."
"Unlike previous periods of economic uncertainty, today's entrepreneurs are severely limited in their ability to finance new business ventures by leveraging the value of their home, borrowing from friends and family or securing a traditional loan, NSBA chairman Keith Ashmus says. This leaves one clear, often unattractive option: credit cards."
"Other options for frustrated entrepreneurs are limited" states Wes Sturges, president of Bank of Commerce, which caters to small companies.
PROBLEM:
In the good ole' days, there was credit available. Capture this thought: In days of yore, when credit was available, through secured or unsecured loans, it was something like this: Your banker asked you for 2 years tax returns, (business and personal), current P & L (profit and loss) statement, Balance Sheet, blood sample (just kidding, ... or not), and you had to have a strong FICO score, maybe in the 720+ range to score a loan. Oh yeah, that's if you had been in business for 2 years, had strong business statements, were making money and, for all intensive purposes, could prove you really didn't need the money anyway! Well, that world doesn't even exist today.
SOLUTION:
Let's have a drum roll for the modern barter trade exchange! (insert drum roll here). Well, we can't speak for other barter exchanges and their credit extension policies, but see how the thought process for evaluating credit requests at SynergyStreetTRADE grabs you:
What is needed to obtain a trade dollar line of credit at SynergyStreetTRADE?
- Two years personal and business tax returns...............NOPE
- Two years P&L and Balance sheet reports...................NOPE
- FICO score of 720 or above.........................................NOPE
- Proof that you really don't need the money anyway.......NOPE
- Personal or business product or service that is of value.........YEP!
Unlike traditional lenders, a barter exchange can evaluate the consideration for extending trade dollar line of credit based upon the value of the product or service to the other community exchange members and their confidence in the entrepreneur's ability to deliver the product or service in a professional manner. Are there risks to the trade exchange? Yes, of course. But the risk is minimized, because the credit is based upon the law of supply and demand, and the integrity of the business owner, not regulatory agency underwriting criteria.
For example: If a restaurateur joins SynergyStreetTRADE and requests a line of credit, the exchange bases their decision upon facts like these: Do we think people will continue to eat? Do we think people might like to pay for their meals at this restaurant on trade (when the purchasers trade dollar may have costs them, say 30-40% on the cash dollar), and do we think the restaurant will be in business and honor the trade/gift certificates? If the answer is yes, then a line of credit is issued. It's that simple!
Now then, once the line of credit is issued to the restaurateur, they can spend their trade dollars on such things as printing, web design, marketing, sales training, consulting, employee incentives, cleaning, advertising, etc. Is that cool or what? (Oh by the way, did we mention that the restaurateur gets these items on trade for the cash expenditure of maybe 35% -their actual food costs of when they sold the meals). AND-they got to spend their line of credit, before they had to deliver the meals, SO, they actually may have generated cash business with trade dollars (with advertising, etc.) before they had any cash cost of fulfillment on the trade meals! They repay their line of credit from their sales at the online trade exchange. You gotta love it!!!
Entrepreneurs; do you have a good product or service that you're willing to barter?
GET THE CREDIT YOU DESERVE! Contact SynergyStreetTRADE today. 800.922.6806 email: info@SynergyStreetTRADE.com or contact CEO, Tony Holden tholden@SynergyStreetTRADE.com
Expand your horizons by joining the SynergyStreet business networking portal. It's FREE to Join, and the possibilities are unlimited!
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There is an important distinction between extending credit in the SynergyStreetTRADE marketplace vs. the Cash marketplace. In the Cash marketplace, the bankers who contemplate the risks of lending have imperfect information. Bankers are not directly connected to the potential customers of the business that they are considering giving a loan. This level of uncertainty translates into tighter overall credit policies and probably missed opportunities to fund viable business opportunities. However, in the SynergyStreetTRADE marketplace, there is complete visibility of buyers and sellers to the “lending” authority. Since SynergyStreetTRADE is a closed market system, presumably it will be easier to make good credit extension decisions based on knowledge of what the community needs and wants. This will allow capital to be used wisely in a manner that maximizes economic output and consequently raises the standard of living for SynergyStreetTRADE members. As SynergyStreetTRADE grows, is there an opportunity to make the needs and wants of the members even more transparent? The benefits of greater visibility of the needs and wants of the SynergyStreetTRADE community might be: 1) credit can be more assuredly applied to optimal economic use, and 2) new suppliers can be attracted to the SynergyStreetTRADE community to balance a situation where demand for a product or service is not sufficiently met by the current supply.
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