Q: My retail business is low on cash. Can we repay our debt with merchandise instead? Is the merchandise’s worth evaluated at retail or wholesale cost?

A: If the borrower has cash, he is not allowed to turn the lender aside with other items, whether moveable (metaltelin) or real estate. If the borrower does not have any cash, though, he can pay with whatever available assets he has. Nonetheless, the lender is entitled to say that he prefers to wait until the borrower has cash and he does not want to accept payment now with merchandise (C.M. 101:1-4; Pischei Choshen, Halva’a 4:10).

If the payment is made with merchandise, it is usually not evaluated at the retail cost (unless the lender was interested in purchasing such an item anyway). Rather, the merchandise is evaluated by the amount that the lender could receive by selling it relatively quickly at the current time and place, in order to convert it to cash (C.M. 101:9). Therefore, the merchandise would generally be evaluated at the wholesale price that the lender could receive by selling it to a vendor, or the price that he could obtain selling it on eBay or the like.