The Cash Flow Group, Inc

Consumer and Commercial Debt Collection Florida

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Fort Lauderdale / Miami, FL

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Accepting Stock Instead of Payment?

Thursday, December 13th, 2018 | Florida commercial collection agency | No Comments

stock to cash,The Cash Flow Group

The Cash Flow Group a South Florida collection agency can help.

Sometimes, a company that cannot pay its bills may offer you stock, or equity instead of paying what is owed. If you have a personal relationship with the company, or truly believe that their financial problems are temporary, this can be a tempting option. It may seem that by accepting stock options, equity, or other collateral, you are avoiding the hassle of collecting on the debt. Perhaps you want to give the company a chance to fix things in the hopes that may be able to make more money in the long run.

Accepting stock or equity may also feel good emotionally. No one wants to think that they’ve been misled, or that they’ve made a bad decision about when to extend credit. Unfortunately, it is rarely a good idea. For starters, unless the company is public, it is very difficult to turn your stock into cash. If the company is public and having financial difficulties, their stock is probably not worth very much.

If you are determined to pursue this idea with a company that owes you money make sure to do your due diligence. Remember, once you accept stock in place of payment, you are no longer a vendor, you’re an investor. If this company’s business model and current situation means you wouldn’t invest in them under normal circumstances, don’t do it now when they’re already in trouble. Make sure that you also research any potential tax implications, IPO plans, and the effect that not receiving money immediately will have on your own cash flow. Make sure any agreement you sign is fully reviewed by a lawyer and does not leave you responsible for other debts the company may have incurred or may incur in the future.

Most importantly, before accepting stock options or equity, make sure to consult with a commercial collection agency like The Cash Flow Group. With our years of experience, there may be things we can do to get you the money you are owed. If you want to invest in a company, make sure that you’re doing so because you believe in the company and think it’s a good investment, not because you’re desperate to resolve a difficult situation.

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The Cash Flow Group, Inc

3389 Sheridan Street

Suite 135

Hollywood, FL 33021

Email: info@thecashflowgroup.com

800.226.2006 Toll Free

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