With credit tight and banks reluctant to lend money, this may be a good time for businesses to try something else: bartering.

The modern barter system is often misunderstood, and therefore underutilized by companies that could benefit from the potential to save cash and perhaps even expand business.

Barter may have been around since the beginning of time, but it has come a long way from simply trading one service for another. In recent years, its reach and potential for businesses to maximize profit has significantly expanded. Corporate-trade transactions allow businesses to turn illiquid assets into trade credits by re-selling the excess product in another market.

“The real strength is in the business-to-business stuff,” said David Wallach, president of the International Reciprocal Trade Association. By turning excess product into trade credits, companies are able to save money, recoup any losses, and even expand their business.

With more companies looking to save cash, corporate trade may be a potential avenue for profit.

“No matter what business you're in, if you lost a percentage, you are looking for alternatives," said Ron Whitney, Executive Director of the International Reciprocal Trade Association.

Rather than take a hit on unused assets, corporate-trade companies re-sell their excess inventories and use the trade credits they receive in exchange to make other transactions.

"It's a win-win for the client" said Richard Vendig, chief financial officer of Active International, a company that provides marketing and business solutions. "They can sell the [unused] product and still get 100% economic value.”

While each transaction is different, the hottest item is often a media buy, which is the purchase of advertising space from a media company. Most of these deals are done with a combination of cash and trade credits.

"Media buys are the item of choice. Most big corporations have big, sizeable budgets, and that’s a way to supplement," said Steven White, CEO of Itex Corporation, a small business barter exchanged based in Bellevue, Wash.

In a down economy, the need to keep your company’s name in the public becomes a big priority.

“Advertising is even more important when you’re tight on cash, because you have to examine every potential cash channel,” said Eugene Fram, emeritus professor of marketing at the Rochester Institute of Technology.

Media barter stands out from other trade transactions by giving companies the opportunity to increase their business.

“One of the better ways to use barter is to buy advertising, because then you are bringing in actual cash business and increasing your market share" said Wallach.

As a result, some companies that specialize in media barter are seeing unprecedented growth.

"It's been one of our best years. Our business has been growing near 30%, and we've opened eight international offices in the last eight months," said Brian McMahon, president and CEO of Magna Global.

The media-barter business helps those cash-strapped companies by providing an alternative way to save on cash. Tough economic times often means fewer companies are advertising, which can give some companies a badly needed leg up.

“For many products, right now is a great time to advertise. The noise volume is way down. Your advertising has better chance of being noticed," said Laura Ries of Ries & Ries, an Atlanta-based marketing firm.

While media barter may thrive on companies’ need to save cash, many businesses use corporate trade no matter what the economic outlook is.

"Corporate trade is really not a short-term tactic. Many clients look at it as a long-term strategy," said Active’s Vendig. 

Still, not everyone is embracing corporate trade.

"Web traffic is up 23% over last year and 46% over two years ago. Registrations are up about 50%, but transaction volume has not gone up," ITEX’s White said.

White attributes the hesitance among businesses to anxiety about doing any type of business deals in this economic environment, and also to misunderstanding the way the transactions work. The premise, though, is simple.

“Companies take what they have and don’t need and turn it into what don’t have and do need,” said Bill Bailey, founder of BarterBrokers.com.