Bethesda, MD (PRESS RELEASE – June 21, 2009) — The Interface Financial Group (IFG), North America’s largest alternative funding source for small business, offers the added service of invoice factoring to companies signing up for a loan with the new American Recovery Capital (ARC) program, to help small businesses survive the current economic storm. ARC encourages small businesses to take out interest-free loans of up to $35,000 that are provided by commercial lenders and 100 percent backed by the Small Business Administration (SBA). In addition, IFG’s factoring services can help turn a small business’s accounts receivables into cash.
The Interface Financial Group
Part of the United States government’s economic stimulus package, ARC was established under the American Recovery and Reinvestment Act (ARRA) which was signed in February 2009 by President Barack Obama. The ARC program debuted on June 15 in order to help small businesses pay off existing debt and free up cash so they can pay off mortgages, loans, lines of credits, and credit cards. The loan is interest-free and the borrower has five years to repay with the first payment deferred for one year. To qualify for the loan, a small business must show it was profitable at least one out of the last three years. To learn more, visit the ARC small Business Administration website.
The intent of the ARC program is for businesses to pay down debt in order to recover from the current recession. Additionally, if a business is suffering an immediate financial hardship, declining sales and revenues, and having difficulty paying employees, suppliers and operating expenses, then invoice factoring can be of immediate assistance.
“Many of America’s business owners are just hoping they can make it through these difficult economic times. The ARC program is intending to give small business owners some breathing room, and the reality is that many businesses can also use invoice factoring in conjunction with the ARC program in order to survive,” said The Interface Financial Group, Inc.’s Chief Operating Officer Steven DeYoe.
Invoice factoring provides short-term working capital, and is an extremely fast way to turn accounts receivables into cash. Many small businesses must wait 30, 60, or sometimes even 90 days for invoices to be paid. This can put a small business suffering hardships from the economic downturn into the red, making it difficult to pay bills, and even the payroll for employees, or order new supplies needed to keep doing business.
Invoice factoring has become a highly effective cash management strategy, particularly in the construction industry and for sub-contractors who often experience cash flow problems: meeting payroll, buying supplies, paying benefits and Workers Compensation. Factoring allows businesses to obtain funds based on the funds they expect to have coming in, or their current accounts receivable.
“Without The Interface Financial Group we would have had a tough time finding funding for our contracts. IFG’s team goes above and beyond in helping small companies meet their financial needs,” said the Quartus Corporation President Joseph H Haggler IV.
Invoice factoring is different from a traditional bank loan or the SBA-backed ARC loan in that bank loans involve two parties, while factoring involves three parties. Banks base their decisions on a company’s credit worthiness, whereas factoring is based on the value of the receivables. Factoring is not a loan – it is the purchase of a financial asset, or the receivable.
The Interface Financial Group (IFG) typically looks at the creditworthiness of a client’s customers and pays within as little as 24 hours. IFG does not expect to buy 100 percent of a company’s receivables, and there are no minimum or maximum sales volume requirements. IFG’s professional rates are competitive because each client’s circumstances vary, which may have an impact on the fees charged. The program allows choices of invoices to be factored, enabling customers to retain most of their money, while spending the minimum fees to guarantee adequate cash flow.
Standard accounts receivable factoring has been around for more than 4,000 years. IFG begins the single invoice factoring process with due diligence that typically takes one to two business days. Once completed the client is at liberty to offer invoices to IFG for purchase. Upon receipt of invoices, IFG checks the credit of the debtor named on the invoice and makes sure that the sale represented has been satisfactorily completed. Once this is done the debtor is advised of the purchase by IFG and the client receives their funding. At the end of the credit period, the debtor pays IFG directly, completing the transaction.
About The Interface Financial Group (www.ifgnetwork.com)
The Interface Financial Group (IFG) is North America’s largest alternative funding source for small business, providing short-term financial resources including invoice factoring (invoice discounting). The company serves clients in more than 30 industries in the United States, Canada, Australia, and New Zealand, and offers cross-border transaction facilities between the U.S. and Canada. With more than 140 offices across North America and over 35 years of experience, IFG provides innovative invoice factoring solutions by offering short-term working capital to growing businesses. Single invoice factoring, or spot factoring, is an extremely fast way to turn receivables into cash.
IFG was founded in 1972 to provide short-term working capital to help small to medium sized businesses grow. The IFG organization operates on a local level, providing clients with local knowledge and experience and business expertise in numerous diverse areas including accounting, finance, law, marketing and banking.