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Doing business with Greece? Cash is king

Greek debt crisis hurting flow of imports

Import-export relationships rely heavily on two factors: trust and access to capital.

In Greece, as the nation's economic crisis unfolds, small importers in America are facing unique challenges—namely getting money to their Greek suppliers and distributors overseas. While U.S. businesses are receiving deliveries from Greece, some U.S. entrepreneurs say they're having difficult getting money transferred overseas as Greek banks remain closed amid ongoing capital controls.

Jonathan Williams Margaritakis is owner of Go Greek Yogurt in Beverly Hills.
Harriet Taylor | CNBC
Jonathan Williams Margaritakis is owner of Go Greek Yogurt in Beverly Hills.

Just ask Jonathan Williams Margaritakis, owner of Go Greek Yogurt, a Beverly Hills shop that offers regular Greek yogurt and frozen varieties. He recently has not been able to make payments overseas.

"Right now, we don't pay our suppliers because the banking system is frozen," Margaritakis said. "But we can still place an order."

The shop sells frozen yogurt and other products from Greece, including olive oil. Greek imports can account for up to 40 percent of the shop's inventory. Margaritakis' most recent order was fulfilled last week, and he has about a month's worth of Greek inventory stocked.

Across the country in Hingham, Massachusetts, Jeremy Johnson of Encore Specialty Food Importers is also facing transaction issues.

While the food importer is still receiving shipments from Greece, Johnson is worried some of his Greek suppliers may start to ask him to pay for goods in advance to hedge any capital flow problems in Greece.

"If we pay that [cash payment] in advance, what guarantees do we have that the order will ship and will deliver to us?" asked Johnson, national sales manager for the food importer. Johnson made the comments to NBC affiliate NECN.

Johnson said he imports millions of dollars' worth of products from Greece each year. "If it [the supplier] doesn't deliver, for whatever issue, then we're out of the product and out of the cash."

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Looking ahead, if Greek imports wind up halted for a longer duration, both business owners said they may have to consider stocking up on American-sourced products.

"That's the unknown, and what we can't control," Margaritakis said.

High demand for euros

Meanwhile, as Greece's financial crisis widens, nuances of a growing cash-based economy are emerging as usual routes for transactions are frozen.

U.S.-based entrepreneurs who have relationships with suppliers in Greece report Greek businessmen and women dangerously carrying around bags of money to do business as local banks have not yet reopened.

Gretel Dennis, a property consultant based in London who recently visited the Greek island of Corfu, said that the island felt safe and removed from the economic tension in Athens.

But cash is essential to getting anything done in Greece. Carrying "euros was a must and the smaller denomination you had, the more likely you were to be served" in restaurants, Dennis said.

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