SOURCE: The Interface Financial Group (IFG)

Factoring invoices

September 23, 2010 08:00 ET

Invoice Factoring Provides Cash to Support Small Business Operations and Growth

Confidence Among U.S. Small Businesses Rose for the First Time in Three Months

BETHESDA, MD--(Marketwire - September 23, 2010) -  The National Federation of Independent Business (NFIB) shows that its August optimism index increased to 88.8 from July's 88.1, and while four of the index's 10 components rose, one was unchanged. The average measure in the five years before the economic decline began in December 2007 was 100.6. The Interface Financial Group (IFG), North America's largest alternative funding source for small businesses, uses the index to gage the small business marketplace. The August survey also reported job loss averaging 0.3 employees per firm. The survey has reported job losses in 10 of the last 12 months.

Additionally, Bloomberg reports that, according to a private survey, confidence among U.S. small businesses rose in August for the first time in three months as the outlook for sales and economic growth turned less gloomy. Other recent surveys indicate that financials of small businesses are stabilizing, an important observation as it is a prelude to growth, which is expected to be slow through the remainder of this year and into the beginning of 2011.

"Although expectations for the economy and sales improved, both measures were still in recession territory," said George Shapiro, chief executive officer of The Interface Financial Group (IFG). "This explains why the outlook for hiring and capital spending at small companies weakened last month. More jobs and increases in consumer spending are needed to bolster the recovery."

50 percent of NFIB survey respondents indicated that they will go to the bank for credit when required, even though the banks are currently not lending to small businesses due to increased requirements. Many banks have indicated that there is money to lend providing the financial statements are strong enough.

For those businesses whose financials may not meet the banks requirements, alternative sources such as invoice factoring can provide cash for operations and to support growth until the financials will support traditional lending. Factoring enables a company to provide credit to its customers while at the same time obtaining cash for business operations and expansion.

In fact, many businesses are now using factoring companies that advance up to 90 percent against invoices as part of their normal operations when they do not get paid for 30 to 60 or 90 days. A bank loan involves two parties, whereas invoice factoring involves three parties, and while banks base their decisions on a company's credit worthiness, factoring is based on the value of the receivables. Invoice factoring is not a loan -- it is the purchase of financial assets, or a company's receivables.

IFG's popular private label factoring solutions include Export Factoring, providing factoring services for companies who export from the United States and Canada; P.O. Funding to finance purchase orders when a company receives a purchase order and needs to purchase supplies to fulfill the order; and Inventory Financing, a solution promoting a company's growth by funding them when they must expand and purchase inventory.

 IFG does not expect to buy 100 percent of a company's receivables, and there are no minimum or maximum sales volume requirements. 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, Singapore, the United Kingdom, 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 Contacts:
    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;
    T: Toll Free: Canada -- 877.340.6893