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Bob Meyer
 

Beyond The Limits Of Cash or Credit

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03/16/2010

Valuable Money Alternative Awaits The Alert Entrepreneur

At the prestigious Wharton School of Finance, Ian MacMillan (professor of entrepreneurship) was known for suggesting his students amass as many credit cards as they could. �In the early stages of a growing business,� he affirmed, �you�re sort of starving in the midst of plenty, because even when orders are booming, an entrepreneur may not have sufficient income to pay suppliers. So credit cards can act as a stop-gap or a cushion.�

There�s no argument with the professor about the need for cash infusions in the early days of a new or expanding business. Last year there were nearly 1 million business start-ups in the United States. An incredible 50% of them opened their doors with $10,000 or less in capital.

However, the professor should have include in his curriculum another proven method of financing entrepreneurial startups � the use of trade dollars. Unknown to the professor and many others, too, are the merits of a good trade exchange with the many ways it can assist a fledgling operator.

A new owner who�s able to provide needed products and services to the exchange�s membership, can instantly borrow trade dollars against future sales. He then can immediately use those trade dollars to make necessary improvements or selected renovations, purchase a myriad of needed merchandise, acquire valuable advertising, even finance a gala grand opening promotion.

Maximum cash flow is retained because financing charges, the interest on the trade loan, is payable in trade dollars. The exchange provides another key benefit, that of greater cash flow which may be used for paying those necessities � salaries, utilities and phone bills, as well as suppliers.

Thanks to the trade exchange, cash at this critical time can be used to build the new enterprise rather than paying the banker. And the circle is completed when the new owner happily opens the door to the exchange members, so as to earn as many trade credits as possible to quickly pay off the trade loan.



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