Options for Financing Gem Buying for Profit
How should you pay for investment gems? Learn the pros of cons of three options for financing gem investments — cash, debt, and memoing.
3 Minute Read
Option 1: Cash is King
To be clear, even when a deal is "all cash," no "cash" may be exchanged. Payment is likely effectuated via a check — usually certified funds, such as a bank cashier's check — or a wire transfer from the bank.
Paying cash for a gemstones has a few advantages and disadvantages. Typically, cash is the easiest form of payment because there are no complications. You may even be able to negotiate a discount if you pay in cash, since cash involves less risk for the seller. Cash may also lower the overall purchase price because you'll pay no finance fees or interest.
However, paying in cash will immediately and directly impact your cash flow. Withdrawing money from your bank account lowers your cash balance, which may limit your ability to purchase another gemstone soon after.
Option 2: Debt
You may choose to take out a loan to finance your gemstone investments. If you're setting up a new business for buying and selling gemstones, this might be possible through a conventional bank loan.
Before using debt for financing gem investments, you should consider many factors, including the liquid assets you could use as collateral for the...
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