SOURCE: The Interface Financial Group (IFG)

Factoring companies

December 21, 2010 13:09 ET

Retail Businesses to Benefit by Using Factoring After Holidays

BETHESDA, MD--(Marketwire - December 21, 2010) - Due to the economy, the holidays are one of the most difficult times for businesses when it comes to cash flow. Due to many extra expenses, from stock and shipping, marketing, and employee overtime, vacation leave payments plus shipping and stocking labor. This is the one time of the year when retail establishments can really benefit by using an age old tactic known as factoring. Small businesses can benefit by receiving working capital, and because factoring is not a loan, there are no upfront fees or co-signers required.

Cash flow does not increase when sales are made to customers using credit; only the accounts receivables increase. During any retail holiday season, the cash does not increase until inventory is sold and depleted. It needs to be replaced, but the receivables usually will not be collected for 30, or even 60 to 90 days after the sales happen. An increase in holiday sales can quickly deplete a firm's cash reserves. Here are some tips from IFG on how to assist cash flow:

  • Verify that billing, collections, and payables systems are efficient.
  • Make sure to share credit terms upfront with customers.
  • Watch your customer credit limits.
  • Think about purchasing a cash flow management system.
  • Watch any overdue accounts carefully.
  • Try to negotiate pre-New Year debtor settlements.
  • Factoring speeds up cash flow and increases working capital.
  • Manage payables by waiting as long as possible to pay bills.

Single invoice factoring can benefit businesses that do not get paid for 30, 60 or 90 days. Here's how. A factor will advance up to 90 percent against these invoices. IFG looks at the creditworthiness of the client's customers and can fund within as little as 24 hours. Unlike some factoring companies, IFG does not expect to buy 100 percent of a company's receivables, and there are no minimum or maximum sales volume requirements.

Accounts receivable factoring is a highly effective cash management strategy that has been in existence for 4,000 years. The Interface Financial Group (IFG) typically looks at the creditworthiness of a client's customers and pays within as little as 24 hours. IFG does not expect to buy 100 percent of a company's receivables, and there are no minimum or maximum sales volume requirements. 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.

After factoring 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. At the end of the credit period, the debtor pays IFG directly.

As part of their normal operations factoring companies advance up to 90 percent against invoices to clients who 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, is not a loan -- it is the purchase of financial assets, or a company's receivables. Factoring is based on the value of the receivables.

IFG's 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. In addition, the company'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, to guarantee adequate cash flow while spending the minimum fees.

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, the United Kingdom, Australia and New Zealand, and Singapore, offering 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