The Interface Financial Group

The Interface Financial Group

February 20, 2012 08:43 ET

Merlin Misses Again as Businesses Self-Fund

More Owners Using Savings to Continue Trading

BIRMINGHAM, WEST MIDLANDS--(Marketwire - Feb. 20, 2012) -

Editors note: There is one photo associated with this press release.

The Interface Financial Group (IFG), North America's largest alternative funding source for small businesses, announced that the company offers support to small businesses that are struggling with raising capital to fund growth prior to economic recovery. IFG provides short-term financial resources including debtor factoring, invoice discounting, construction factoring and invoice factoring to companies in the UK, Ireland, United States, Canada, Australia, New Zealand, and Singapore.

A Royal Bank of Scotland shortfall has made the top five banks miss their Project Merlin target for making more credit available to small businesses.

Under Project Merlin, Britain's top five banks said they would increase lending available to small and medium-sized enterprises (SMEs) to £76billion and boost lending available to all businesses to £190billion. But the figures from the Bank of England confirmed that gross lending to SMEs came in at £74.9billion and gross overall lending at £214.9billion.

The good news was that the overall lending target for the year was hit, but the bad news was that the SME sector within this total, fell short by over £1bn - a lot of money spread across this struggling sector. This trend was seen throughout 2011.

So how are businesses surviving? New research from the invoice finance community indicates that more business owners are resorting to drawing on their own personal savings to keep their businesses going, and using other types of funding instead of Bank Loans. In a study conducted during Q4 of 2011, using personal savings to raise the finance needed for running their firms became the number one option for SME owners in the UK, ahead of bank overdrafts, loans and credit cards. Only 4% of firms stated they had applied for funding through government initiatives.

Alongside this finding, the study also revealed that two thirds (66%) of UK business owners have not even applied for external funding during the past 12 months - an increase of 11% year-on-year.

Paul Barnsley, chief operating officer for The Interface Financial Group (IFG) said "It's clear the lack of awareness among SME owners of the full range of available funding options is their biggest barrier for effectively accessing the finance they need to run and grow their firms. Also funding packages are and will continue to change and evolve. With new and flexible invoice factoring or invoice discounting products now becoming main stream, business owners need to look further than the bank".

Paul added "solutions like factoring and invoice discounting may now be part of a funding package forming a 'cocktail' of facilities, rather than just one type, as was more the case in the past. "At the same time, it is also important that government agencies understand how invoice finance works, and how appropriate it is for SMEs looking for funding to help them grow. It could and should be part of a portfolio of finance solutions promoted to businesses by the different government agencies. It's worrying if businesses continue to tap into their personal savings, as this source is not sustainable. It could also lead to more failures over time, which is why the invoice finance community must raise its game and get their products in front of owners as a matter of urgency"

About The Interface Financial Group (

The Interface Financial Group (IFG) provides short-term financial resources including invoice factoring (invoice discounting). IFG launched the UK operation in 2010 following the success of its New Zealand, and Australia businesses which launched in 2004, and 2006. IFG's innovative products also includes spot factoring - the purchase of a single invoice or number of invoices. IFG does not require the whole debtor book.

The IFG Network is the funding arm of The Interface Financial Group providing capital and transactional support to IFG's international office network. IFG has grown to over (150) international offices in the UK, the United States, Canada, Ireland, Australia, New Zealand, and Singapore. Each IFG office is managed on a local level, providing immediate service to clients with local knowledge and experience. This makes IFG unique to all other Factoring Companies in the UK. The IFG team has substantial business experience and expertise in numerous diverse areas, including accounting, finance, law, marketing, banking, etc.

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