Invoice Discounting to Increase as Payment Terms Deteriorate
Announcement posted by THE INTERFACE FINANCIAL GROUP 15 Apr 2011
Sydney, NSW (PRWire – 15 April 2011)–The Interface Financial Group (IFG), a growing source of alternative funding for Australian small businesses, announced that the company offers working capital finance to small businesses whose growth is being thwarted by slow paying customers. IFG provides a short-term finance facility including single and batch invoice discounting to companies in Australia, New Zealand, the UK, Ireland, the United States, Canada, and Singapore.
Credit reporting agency Dun & Bradstreet (Australia) recently released data showing that despite the relatively buoyant economic conditions in Australia following the Global Financial Crisis (GFC), average payment terms continued to deteriorate to 55 days. In addition, the amount of overdue trade credit increased to 30% as compared to 12% in the two years spanning the GFC.
David Hechter, Chief Operating Officer for IFG in Australia said the trend reflects the ever growing trend for large companies to command long payment terms from their suppliers and contractors. "The Australian market has many important industry sectors - such as grocery, mining and banking - where a few number of companies have dominant market positions. This puts them in a strong position to command longer payment terms from the smaller suppliers, many of whom are small businesses. This is why many small businesses are taking up invoice discounting and factoring services so that they can at least leverage the credit worthiness of the large customers to obtain working capital finance."
Invoice discounting and factoring belong to the family of debtor factoring products whereby a small business can sell invoices toa third party, typically either a specialist factoring company or a bank. Factoring and invoice discounting are advantageous relative to a bank overdraft because the bank loan will be capped based on the security provided whereas the factoring facility can grow as the company's sales and accounts receivables grow. In addition, a factoring company will be more concerned for the credit worthiness of the small business' customer base because it is ultimately the customer that is repaying the invoice.
Invoice discounting is structured as a 'buy/sell' transaction which allows the small business to use the facility only when required without having to be tied to a long-term contract with minimum fees. With invoice factoring, 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 andinvoice 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 group of invoices, but IFG does not require the whole debtor book.
IFG Network is the funding and operational 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 companiesin 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, NSW 2027
T: Toll Free: 1300 957 900