Accounts Receivable Factoring for Small Businesses

Bethesda, MD (PRESS RELEASE – July 26, 2009) — The Interface Financial Group (IFG), North America’s largest alternative funding source for small business, reports that accounts receivable factoring for small business can convert payments on terms to cash on delivery, aiding small businesses in their effort to pay for health care costs for employees. New research was released by the U.S. Public Interest Group (USPIRG), revealing that 17 percent of small businesses currently do not offer health coverage due to the red tape and high costs. Successful health reform could yield some serious benefits for small businesses in the United States.

The USPIRG survey also revealed the following:

  • 78% who do not offer health coverage would like to offer it to employees.
  • 80% who would like to offer coverage cite cost as a barrier to doing so.
  • 55% offering health coverage do so to attract and retain employees.
  • 27% who offer health coverage do so to increase productivity.
  • 24% felt that their interests were represented in the health reform debate.

According to Chief executive officer George Shapiro of The Interface Financial Group, Inc. (IFG), here’s how accounts receivable financing could assist small business owners with being able to afford health care coverage for their employees. “As a small business owner typically has accounts receivables ranging from 30 to 60 to 90 days out, rather than waiting for these accounts to be paid, small businesses can shorten these payment terms or convert payments on terms to cash on delivery faster, then apply this to health care costs for their employees.”

The survey discovered that those small business owners who do make the sacrifices necessary to provide health care consider it less a moral obligation than a smart business strategy to increase employee productivity and attract and retain talented employees.

In addition, a recent analysis by MIT Professor Jonathan Gruber, commissioned by the Small Business Majority, found that health reform would save up to 128,000 small business jobs that would otherwise be lost due to high health care costs.

Accounts receivable factoring benefits businesses that do not get paid for 30 to 60 or 90 days by advancing up to 90 percent against invoices. IFG looks at the creditworthiness of the client’s customers and can fund within as little as 24 hours. The company does not expect to buy 100 percent of a company’s receivables, and there are no minimum or maximum sales volume requirements.

Invoice factoring has become a highly effective cash management strategy, particularly in the small businesses that often experience cash flow problems during a recession including 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.

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 financial assets, or receivables.

The Interface Financial Group (IFG) 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 (

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 in addition to accounts receivable factoring, including accounting, finance, law, marketing and banking.

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