IFG Network UK Limited

IFG Network UK Limited

February 25, 2011 05:01 ET

Small Businesses Still Seen as Risky by the Banks

Still Opportunity for Funding Using Invoice Financing

BIRMINGHAM, WEST MIDLANDS--(Marketwire - Feb. 25, 2011) -

Editors note: There is a photo associated with this release.

The Interface Financial Group (IFG), North American 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 invoice discounting or invoice factoring to companies in the UK, Ireland, United States, Canada, Australia, New Zealand, and Singapore.

The banks still consider many small and medium-sized enterprises (SMEs) as being too risky to lend to, it has been claimed. SMEs think the banks are generally applying tougher criteria than was the case a couple of years ago.

The Federation of Small Businesses has continuously highlighted the problem of insufficient credit for SMEs during and since the recession. However, there are still opportunities for companies to acquire credit if they conduct proper planning and have a good business idea.

Paul Barnsley, chief operating officer for The Interface Financial Group (IFG) said "it is important for financial and funding institutions to appear more welcoming to help fledging firms than their rivals. Banks have traditionally competed over time to be the most favourable for start-ups and to fund growing businesses, but times have changed somewhat, and SME owners are now surprised when the bank can't, or does not appear to help."

SMEs will hope that the deal agreed last week between the government and the UK's biggest banks will lead to greater availability of finance, but SME owners must also consider all avenues for funding – not just the bank as the increase pledged by project Merlin are actually quite small.

Five leading institutions signed a commitment to make £190 billion of new credit available to businesses in 2011, which is actually fairly modest rise compared to last year. On top of this the government will not be able to force banks to lend. This will be determined by the banks own underwriting and risk assessment of the business and the industry in which they operate.

Debt Factoring and Invoice Financing are potential credit routes for to consider. These involve selling invoices to a third party, either a specialist provider or a bank. There are even specialist funders in this sector that will look favorably at businesses even though the traditional banks might not consider them credit worthy. This can include sectors that the banks have issues with like contracting, however SME's who are in this sector should not despair, as some funders will offer facilities through specific construction factoring arrangements.

Paul Barnsley (C.O.O of IFG) said "A lot of companies have not considered using strategies like invoice discounting or debt factoring as an alternative, however they can be a very cost effective and efficient way of managing their cashflow.

About The Interface Financial Group (www.ifgnetwork.co.uk)

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.

To view the photo associated with this release, please visit the following link: http://www.marketwire.com/library/20110224-pbarnsley8.jpg

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