SOURCE: The Interface Financial Group

The Interface Financial Group

August 21, 2009 17:21 ET

Invoice Factoring Can Aid Startup Businesses in the U.S.

Startup Businesses Created an Average of 5.5 Jobs per Firm in 2004; This Includes Not Only 4.1 Paid Employee Positions, but Also 1.4 Entrepreneurial Positions

BETHESDA, MD--(Marketwire - August 21, 2009) - The Interface Financial Group (IFG), North America's largest alternative funding source for small business, announced a new report available on the U.S. Small Business Association Web site titled the Kauffman Firm Survey (KFS), providing insight into better understanding American business startups and their dynamics. Because the U.S. economy relies upon sustainable economic growth for long-term prosperity, the Kauffman Firm Survey (KFS) is a panel study created using a stratified random sample of all startups in 2004 from the Dun & Bradstreet database with follow-up surveys on these firms for 2005 and 2006.

92 percent of all KFS sample startups were new, independent businesses, and about 7 percent were purchased from existing businesses or franchises. Of the KFS sample firms, more than half of the businesses were home-based businesses between 2004 and 2006, 40 percent operated their business at rented or leased places, and 5 to 7 percent of them operated at their own purchased spaces.

These startup businesses created an average of 5.5 jobs per firm in 2004; this includes not only 4.1 paid employee positions, but also 1.4 entrepreneurial positions. When starting their businesses in 2004, firms in the KFS sample generated an estimated value of more than $575 million in revenue. By 2006, the total estimated revenue of KFS sample firms had increased by 53 percent to $879 million, while employee payroll grew 56 percent between 2004 and 2006.

George Shapiro, chief executive officer of The Interface Financial Group (IFG), said, "The growth indicated in this KFS study is a good indicator of the future of our business of factoring. Getting a loan from a traditional financial institution can be a long, frustrating process, while invoice factoring benefits startup businesses by advancing up to 90 percent against invoices, providing cash that covers business expenses such as payroll, or supplies."

Factoring it is the purchase of financial assets, or receivables. Accounts receivable factoring differs from traditional bank loans in that bank loans involve two parties, while factoring involves three parties. Banks base their decisions on a company's credit worthiness, whereas factoring is based on the value of the receivables. IFG looks at the creditworthiness of a client's customers and pays within as little as 24 hours.

Factors do not expect to buy 100 percent of a company's receivables, and there are no minimum or maximum sales volume requirements. The factoring process begins with due diligence that typically takes one to two business days, and after this has been completed the client is at liberty to offer invoices to IFG for purchase. Upon receipt of invoices, IFG checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. Once this is done the debtor is advised of the purchase by IFG and the client receives their funding.

IFG's professional rates are competitive because each client's circumstances vary, which may have an impact on the fees charged. The program allows choices of invoices to be factored, enabling customers to retain most of their money, while spending the minimum fees to guarantee adequate cash flow.

About The Interface Financial Group (www.ifgnetwork.com)

The Interface Financial Group (IFG) is North America's largest alternative funding source for small business, providing short-term financial resources including invoice factoring (invoice discounting). The company serves clients in more than 30 industries in the United States, Canada, Australia, and New Zealand, and offers cross-border transaction facilities between the U.S. and Canada. With more than 140 offices across North America and over 35 years of experience, IFG provides innovative invoice factoring solutions by offering short-term working capital to growing businesses. Single invoice factoring, or spot factoring, is an extremely fast way to turn receivables into cash.

IFG was founded in 1972 to provide short-term working capital to help small to medium sized businesses grow. The IFG organization operates on a local level, providing clients with local knowledge and experience and business expertise in numerous diverse areas in addition to accounts receivable factoring, including accounting, finance, law, marketing and banking.

Contact Information

  • Media Contact:
    Kristin Gabriel
    MarCom New Media
    T: 323.650.2838
    E: Email Contact

    Headquarters:
    The Interface Financial Group, Inc.
    7910 Woodmont Avenue, Suite 1430
    Bethesda, MD 20154
    T: Toll Free: USA; 877.210.9748
    Canada; 877.340.6893