Debt Factoring Steps Up for SME's as Banks Step Back
Announcement posted by The Interface Financial Group 30 Oct 2012
Sydney, NSW (PR Wire – 30 October 2012) – The Interface Financial Group (IFG), a growing source of alternative funding for Australian small businesses, announced that the company continues to provide finance to Australian small and medium-sized entities (SME's) who have experienced challenges in obtaining credit finance from traditional sources such as the banking sector. IFG provides short-term financial resources including the financing of invoices for small business to companies in Australia, New Zealand, the UK, Ireland, the United States, Canada, and Singapore
Recent announcements from the Australian banks have reinforced that the outlook for lending to SME's will be tight. New regulatory requirements mandate that banks must retain more capital for each dollar of lending; in addition, the amount of capital that must be held for a small business loan is higher than for a normal residential mortgage loan. Furthermore, the increased challenges of raising capital for lending from overseas investors will further exacerbate the difficulties that SME's have in obtaining a conventional loan from one of the banks in Australia.
David Hechter, chief operating officer for IFG in Australia explains why debt factoring has become so popular in today's credit constricted environment. “With banks tightening credit, it is only natural that SME's would need to explore alternatives outside of these traditional sources. Many SME's are struggling with how to improve cash flow so that their businesses can continue to grow and employ good people. What debt factoring allows them to do is utilise the strong credit credentials of their customer base to obtain that valuable line of credit - however, the funds will likely come from a factoring or invoice discounting finance specialist as opposed to their bank."
Debt factoring - also known as invoice factoring - involves the purchase of accounts receivable by a factoring company which provides cost effective business funding and allows small businesses to obtain the working capital required to support their business growth. With the financing of invoices, a credit facility can grow in line with the value of the accounts receivable as opposed to being capped when property is the security.
Invoice financing leverages the SME's strong customer base which is an often over-looked asset by the commercial banking sector. With selective invoice financing from The Interface Financial Group, there are no minimums, no maximums, no long-term commitments and no lengthy application process.
About The Interface Financial Group (www.ifgnetwork.com.au)
The Interface Financial Group (IFG) provides short-term financial resources including invoice factoring (invoice discounting).IFG launched the Australia operation in 2006 following the success of its New Zealand businesses which commenced in 2004. 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 to be financed.
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 Australia, UK, the United States, Canada, Ireland, 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 Australia.The IFG team has substantial business experience and expertise in numerous diverse areas, including accounting, finance, law, marketing, banking, etc.
Headquarters:
The Interface Financial Group
Suite 1, Level 3, 179 New South Head Road
Edgecliff, NSW2027
T: Toll Free: 1300 957 900