American construction companies take advantage of
the Mutual Credit System and unique Business
Methodology provided by the American Trade
Cooperative to increase the operation’s working
capital, generate new business and increase cash
flow and profits.
The unique feature of the
Mutual Credit
System is that it allows a construction company
to secure a credit line using, as collateral, assets
that are not acceptable to traditional lenders. The
credit line is made available to the construction
company in its trade account and used, in
conjunction with U.S. Dollars, to make purchases
from vendors, also members of the Cooperative.
Construction companies must meet the following
qualifications to be admitted to the Cooperative:
1. be well established and creditworthy
2. have unused and unsold capacity and a
desire to increase sales by providing services to
other
Co-op’s members. Members must be able to “earn” ATC
Trade Credits by selling goods and services
to other members on a part-cash, part-trade credit
basis (Example: 70% cash, 30% Trade Credits)
3. have use for goods and services provided by
other members of the Cooperative. Members must
be
able to “spend” ATC Trade Credits by buying goods
and services from other members on a part-
cash,
part-trade credit basis
Example:
a construction company, member of the Cooperative,
bids on a job and is more likely to secure the
contract because it provides better terms than the
competition by requiring the client to use less cash
to pay for the job (70% cash, 30% Trade Credits).
The Company enters into agreements with
subcontractors, also members of the Cooperative, who
will accept similar terms for their subcontracting
work. In addition the company also makes purchases
of goods and services on a part-cash, part-trade
credit basis, from vendors, also members of the
Cooperative. (Note: This method has been used by
hotels operations effectively for over 30 years in
Switzerland).
It is important to understand that the cost to the
construction company of making these additional
sales is quite low because the fixed costs are
absorbed by the all-cash business it does. Example:
A company with 20 million dollars in revenues and 18
million in expenses covers all its costs, such as
leases, payroll, insurance, advertising, etc. and
the incremental cost of making sales to other Co-op
members will be limited to the direct cost of
providing those additional services.
If the company’s cost of the generating the
additional sales is 50% of the contract price and
additional sales are made on 70% cash, 30% ATC Trade
Credit basis, the cash received easily covers the
cost and the rest is positive cash flow and when the
company uses the 30% in ATC Trade Credits, together
with cash, to pay for subs and other goods and
services from vendors also members of the
Cooperative, those savings add directly to the
bottom line of the business.
Examples of Products and Services available from
Suppliers and Vendors members of the American Trade
Cooperative:
Subcontractors’ services
Equipment purchases and leasing
Various goods and services needed by the operation
Maintenance and other services provided by
contractors
Building and Construction materials
Engineering Services
Advertising of all types
Business Services and more….
