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| Paula Chapman has seen the economy take its
toll on the printing business she and her husband run out of their south
Charlotte home. But that hasn't stopped them from dining out or even
splurging on expensive filet mignons as holiday gifts. Why? Because they
barter. The cash business has been really, really slow, says Chapman, 56, who belongs to two barter exchanges. So it's trade that has kept us at least working and our brains functioning. As the economy continues to sink, more people like Chapman are turning to bartering to keep themselves or their businesses afloat. Chapman, for example, barters printing services for everything from meals to eyeglasses. Networks of all sizes report spikes in interest as cash and credit become increasingly scarce. People who didn't give us the time of day in years past are opening their door now, says Bill Bailey, president of the Charleston-based Barter Brokers International, one of many commercial trade exchanges. When the economy's doing well and people are slammed with cash, they don't need us. All we are is a different currency. In recent months, Bailey has seen business double at his company. With more than 600 Carolinas' clients, it's one of the region's largest barter networks. Other exchanges are smaller and less formal. Some cater to local communities. Some involve simple swaps between individuals. And in an echo of the Great Depression, businesses in some Piedmont counties are even resurrecting a local paper currency. Pegged to the dollar, it's designed to keep money in the community. Wall Street's troubles have created fertile ground for such alternatives. The collapse of financial instruments known as commercial paper, which provided billions in short-term corporate financing, has forced big companies to turn for credit to banks, which then have little left for smaller businesses, says finance professor Campbell Harvey of Duke University's Fuqua School of Business. The small and medium-sized businesses are being hammered right now, Harvey says. That means that it's hard to get working capital One thing you can do is barter. It's a great idea and we're going to see more of it because cash is scarce. Works as a sort of bank; Tim Goodwin of Raleigh was running out of cash in December. He'd spent most of what he had to buy a larger shop for his auto repair business. But the long-abandoned building needed a lot of work. So he dipped into credits he had with the Raleigh-based Barter Business Exchange. The credits paid for the plumbers, painters, electricians, exterminators, contractors and sign makers that allowed him to open Goodwin Automotive in January. If it wasn't for that income stream, there's no way in the world I would have made it, says Goodwin, 35. We never missed a beat. Like similar brokers, the Barter Business Exchange works as a sort of bank. While fees vary from one exchange to another, Barter Business members pay a $500 joining fee and small monthly charges in addition to a 10 percent cash fee on each transaction. When they trade a service such as Goodwin's auto repair barter dollars go into their computerized account. When they want to trade for something themselves, their account is debited. The dollars transfer as credits to the member who provides the goods or services. Think of it as a prepaid Visa card within certain member businesses, says Maurya Lane, owner of Barter Business Exchange, which has around 700 members. Companies like Lane's act as a third-party bookkeeper. Because many brokers have reciprocal agreements, members can trade credits across the country and around the world. |
The beauty is when you're involved with one you really have access to
all, says Lou Amico, 53, president of the Lake Norman-based L.A.
Management Co., a marketing firm whose services include video production
and Web design. Amico has traded for an office copier, home furnishings, a
laptop and jewelry. He even took five clients on a four-day outing to
Fripp Island last fall all on barter.
Most barter brokers cater to businesses and
professionals. But not all. |
