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American Trade Cooperative (ATC) - 775-852-6280 - © 2010 All rights reserved. |
| 1. The American Trade Cooperative - What is it? The American Trade Cooperative is an organization that operates a Mutual Credit System, which provides qualified real estate investors and companies in certain sectors unique financial and credit services. ATC’s unique feature is that members use a Trade Credit, privately issued and asset-backed, in addition to cash, to conduct business. 2. What is a Mutual Credit System? The Mutual Credit System is a financial vehicle created for the benefit of the Cooperative’s membership with the ability to extend credit in the form of a Trade Credit, equal in value to the U.S. Dollar, using as security, unencumbered real estate and other assets. The properties, together with other types of assets, are placed in a vehicle similar to a Trust (*) and act as backing for the issue of the Trade Credits which are then used, as part of the consideration, in the purchase, sale and exchange of property and other assets. *The ATC Trust vehicle is conceptually similar to a REIT, the main difference being that REITs accept assets and issue a security (stock) which becomes publicly traded. The ATC Trust also accepts assets, however, instead of stock it issues a Trade Credit which is used to transact deals involving property and other assets.
3. The American Trade Credit - What is it?
Dual-currency transactions are executed by members of the Cooperative when buying or selling products and services with other members of the Cooperative where payment is made using a combination of two forms of money: the national currency, the U.S Dollar, and a private, asset-backed, electronic currency, the ATC Trade Credit.
4. How are Trade Credits backed?
The Mutual Credit System only issues Trade Credits when a corresponding asset comes into the System. A Member files an application for credit and pledges an acceptable asset as security. The asset can be in the form of real property or other types of assets. The properties are placed in a vehicle similar to a Trust (*) and act as backing for the issue of the Trade Credits which are then used, as part of the consideration, in the purchase, sale and exchange of property and other assets The Cooperative issues a monthly report in the form of a balance sheet that outlines what the system holds as security and compares that to the aggregate number of Trade Credits in circulation, to demonstrate that each Trade Credit is fully backed by hard assets. * The ATC Trust vehicle is conceptually similar to a REIT, the main difference being that REITs accept assets and issue a security (stock) which becomes publicly traded. The ATC Trust also accepts assets, however, instead of stock it issues a Trade Credit which is used to transact deals involving property and other assets.
5. How does the Cooperative credit system work? Current reality is that credit is going to be difficult to get for many years to come. Banks are tightening their credit policies and are only lending to borrowers with strong revenues. There are trillions of dollars in assets that do not generate income that cannot be used as security for loans from traditional lenders. Those assets are considered dormant and, although they have value, they are of no real use to their owners. The assets can be real estate, such as unencumbered land and other non-income producing properties, unused and unsold capacity by manufacturing and construction companies, unused and unbilled time by providers of professional services, etc. Some of those assets lose their value as time passes and the lost value can never be recovered. It was with those assets in mind that the Cooperative Mutual Credit System was formed. The system allows the owners of those types of assets to pledge them and monetize them and use them as investment or working capital.
6. How are credit lines established?
After a credit application, accompanied by acceptable security, has been accepted, a credit line is established and reflected in the Member’s trade account. The Member is free to use the Trade Credits to conduct business.
When a credit line is used a debt is created. Loans in Trade Credits are not repaid in cash and are not placed on an amortization schedule. They are repaid using Trade Credits earned from the sales of real property, product sales or services to other members on a part-cash, part-Trade Credit basis.
8. How much interest does the Cooperative charge on the loans? The interest the Cooperative charges averages 2.5% per annum payable in cash quarterly and calculated on the principal balance owed.
9. How does the Cooperative operate its back office?
Part of the back office operation of the Cooperative is done through an arrangement with U.S. Bank, which provides Members with online access to their accounts as well as transaction posting and transaction viewing.
10. What are the benefits derived from participation in the Cooperative? To Real Estate investors the Cooperative provides the ability to monetize equity that may have very limited marketability and convert it to a transferable form of payment that can be used to conduct business. To a business that qualifies for membership the Cooperative provides a competitive advantage when offering products or services, because it requires the client to use less cash to make the purchase. The Cooperative also provides a way to save cash when purchasing goods and services from other members. Example: A manufacturing company sells product to another member of the co-op on a 70% cash, 30% AT$ basis. That member will have a compelling reason to make the purchase because it can reduce by 30% the amount of cash needed. This is not a discount because the client, through its own membership in the Cooperative, can market its own product or service and use the Trade Credits earned to pay for 30% of the purchase. Trade Credits are deposited in a “trade account” and used, together with cash, to purchase goods and services needed by the operation which are provided by other members of the cooperative.
11. How is the percentage of Cash vs. Trade Credits established? For Real Estate transactions the percentage is established by mutual agreement between buyer and seller. For businesses, most transactions are done either on a 50% cash / 50% trade or a 70% cash / 30% trade, although, different ratios are often used, provided that a transaction has at least 30% in Trade Credits. The ratio is established at the discretion of the Member providing the product or service.
12. What are the qualifications for becoming a member of the Cooperative? For Real Estate an entity must be regularly engaged in the buying, selling, exchanging or managing of real property. For a Business the qualifications are:
13. How much trade business can a member do? For Real Estate there is no limit to the number or volume of transactions that a Member can do. For Businesses it obviously varies from company to company, however, a company can realistically generate an increase between 8% and 10% over its cash business.
14. What are the Tax ramifications? The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, states that the exchanging goods and services for Trade Credits is taxable. TEFRA requires that all organizations issuing private forms of money provide IRS 1099 Forms to all members reflecting all trade activities. The tax liability of the trade business can be minimized and potentially eliminated by spending the Trade Credits on business expenses and reducing the trade account balance, at the end of the fiscal period, to zero or close to it.
15. How does the Cooperative derive its Revenue? The Cooperative earns revenues from various sources:
16. What is the role of the International Real Estate Equity Xchange (IREEX)
IREEX is a fully licensed real estate operation, contracted on the exclusive basis, to provide services related to the American Trade Cooperative (ATC) and to facilitate the use of the American Trade Credit in real estate transactions.
17. Is the American Trade Cooperative like a barter exchange? The answer is no. Both ATC and barter exchanges use a private form of money, however, the similarity ends there. The major difference between ATC and barter exchanges is that our Trade Credit is 100% asset-backed because ATC will not issue Trade Credit without a corresponding asset coming into the system. ATC, like its Swiss counterpart, operates in mainstream business while barter exchanges have, as clients, much lower-end enterprises because of the standards used by the industry.
18. What Sectors of the Economy does ATC provide services to?
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