Carbon Tax Uncertainty Hits Small Business Cashflow

Announcement posted by THE INTERFACE FINANCIAL GROUP 18 Jul 2011

Factoring Helps SMEs to Keep Growing Despite Economic Concerns

Sydney, NSW (PRWire - 18 July 2011) - The Interface Financial Group (IFG), a growing source of alternative funding for Australian small businesses, announced that the company will continue to offer working capital finance to small businesses who have been impacted by the uncertainty created from the Government's Carbon Tax policy announcement. IFG provides a short-term finance facility including single and batch invoice factoring to small and medium sized entities (SMEs).

Whilst the specific details of the policy remain unclear, the uncertainy that has arisen from the Carbon Tax announcement is impacting SMEs right now. The policy announcement added to the uncertain outlook for the Australian economy as retail sales struggle and the financial markets experience volatility from the sovereign debt concerns in both Europe and the United States.

This economic uncertainty is adversely impacting the cashflow of SMEs according to David Hechter, IFG's COO in Australia. "As the economic outlook becomes less certain, companies tend to hold onto their cash for longer periods of time. The Carbon Tax announcement was just another piece of news causing businesses to feel less confident and thus, we are likely to see payment terms either remain at or even increase from the current levels which areat historic highs. The longer it takes for SMEs to get paid, the slower they are to commit to hiring and investment decisions. As the backbone of the Ausralian economy, SMEs are essential drivers of employment and productivity and they need to feel confident in their cashflow to continue their growth strategies. This is a key reason why invoice factoring is increasing in popularity amongst SMEs."

SMEs use debtor factoring as a cashflow management resource when there is a timing gap between when they incur expenditure and when they get paid for the goods and/or services delivered to customers. The invoices generated for the provision of these goods and services becomevaluable assets that can attract finance.With factoring, the credit worthiness of the customer who has purchased the goods and services is actually more important than the SME who delivered them.

Factoring companies structure the financialservice as a 'buy/sell' transaction which preserves the flexibility for the SME in terms of when they use the facility and to what extent. This flexibility to use the service only when required is extremely valuable to SMEs who may go through trading periodswherethis form of finance is not required. The SME incurs no costs during the times when the facility is not being utilised.

About The Interface Financial Group (www.ifgnetwork.com.au)

The Interface Financial Group (IFG) provides short-term financial resources includinginvoice factoring. IFG launchedits Australian 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.

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 otherfactoring companiesin the Australia. The IFG team has substantial business experience and expertise in numerous diverse areas, including accounting, finance, law, marketing, banking, etc.

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