2011 Federal Budget "Too Little, Too Late" for SME's

Sydney, NSW(PRWire – 23 May 2011) -The Interface Financial Group (IFG), a growing source of alternative fundingfor Australian small businesses, announced that the company will continue to provide working capital cashflow finance to small businesses who received little relief from the Federal Budget announced earlier this month. IFG provides a short-term finance facility including singleand batch accounts receivable factoring to companies in its international markets of Australia, New Zealand, the UK, Ireland, the United States, Canada,and Singapore.

The 2011 Federal Budget was always expected to be a "tough" budget given the Gillard Government's pledge to return the budget to surplus in 2012-13. For small businesses - who form the backbone of the Australian economy - the primary policy offering was the introduction of a $5,000 tax write-off for new vehicle purchases by businesses with less than $2 million per annum in revenue. Whilst this policy is superior in simplicity to the Entrepreneur's Tax Offset, the implementation date of 1 July 2012 leaves entrepreneurs waiting too long to receive material benefit from the Budget.

David Hechter, Chief Operating Officer for IFG in Australia, said that the Budget policies were simply 'too little, too late' for small businesses still challenged with a two-speed economy. "Small businesses are feeling under-whelmed by the outcomes of the budget, but the Government did a good job of setting low expectations given the need to find cuts to return to surplus. We commend the Government for devising a simple tax write-off for small businesses who are already over-burdened by red tape, but only allowing the policy to take effect from next year means they will not be able to receive the cashflow benefit until 2013-14. This is simply too long to wait for cashflow relief for small businesses who are doing it tough now. As a result, we are seeing more small businesses exploring the benefits of accounts receivable factoring to fill the void."

Factoring is a financial service targeted at SME's who generate invoices on payment terms for the goods and services they provide to their customers. With the average time frame for an invoice to be paid in Australia averaging over 50 days, many small businesses are challenged to grow their business without adequate working capital. Products such as invoice factoring and invoice discounting can be used effectively by small businesses as a financial 'bridge' over this time frame whilst continuing to grow their businesses.

Small businesses who are finding it more difficult to obtain a loan from the banks can look to factoring companies to provide this important source of working capital. Some companies will even offer a facility that can be used only a seasonal or situational basis so that small businesses with unpredictable cashflow dynamics can use the service only as required with no minimum usage or minimum fees.

W: http://ifgnetwork.com.au/

Headquarters:

The Interface Financial Group

Suite 1, Level 3, 179 New South Head Road

Edgecliff, NSW 2027

T: Toll Free: 1300 957 900