Corporate Barter Transaction Types
Although there are three basic deal structures, a successful transaction can be constructed in innumerable ways. From funding ongoing business needs to consolidating assets or reconfiguring your investments, corporate barter offers extraordinary flexibility.
The corporate barter industry was founded on trade credit transactions. Our clients trade their assets for payment in trade credit which they place toward future purchases from ICON. These services are typically media, such as TV advertising flights, radio spots, magazine pages and digital advertising. In other cases, clients procure common ongoing business services, such as shipping, printing, air travel and hotel reservations. Collectively, these purchases through ICON are called Fulfillment Services.
Cash (also known as a Vendor Subscription Agreement – or VSA)
Some of ICON’s clients prefer to receive cash as payment in a barter transaction. The reasoning varies by client, but in this scenario ICON simply provides cash as payment to finance a new acquisition, fund business expenses, or improve cash flow.
In a cash-only transaction, the client sells an asset at the typical barter multiple of two to three times market value, and receives the proceeds in cash immediately. ICON becomes an alternative financing entity for the client. In return, the client enters into a Vendor Subscription Agreement (VSA) and purchases a predetermined amount of goods and services through ICON.
Creativity Prevails – A Combination of Trade Credit and Cash
One of the benefits of corporate barter is flexibility. In some cases, the best deal is one that combines trade credit and cash. ICON works closely with our clients to understand specific needs and interests, and then builds a deal to address them.