Bethesda, MD (Press Release – October 25, 2011) – New surveys show small business, the engine of the economy, continues to be the nation’s best job creator. But many small businesses can’t take advantage of growth opportunities because they can’t get traditional bank loans.
Data from the Small Business Administration for Fiscal 2011 shows while a record $19.6 billion worth of loans were issued through the SBA’s flagship program to help 53,706 businesses, the money was only directed to the strongest of small businesses. The SBA actually reduced the number of loans of less than $150,000, amounts needed by many small business owners. In addition, because the agency increased the loan amounts it would back, the larger pool made smaller loans less attractive to banks.
The latest survey by the National Federal of Independent Businesses shows business optimism remains weak and that limited access to credit continues to be a major problem.
Clearly, traditional banks and government agencies are “not open” for many small business owners. Because so many entrepreneurs lack the working capital to fuel their expansion plans, they must look at new ways to find the cash.
Many of them are turning to invoice discounting. With invoice discounting, they can get their hands on capital within 24 to 36 hours of requesting help, thus enabling them to pay bills, meet payroll and fund expansion plans during this latest economic downturn.
The leading invoice discounting franchise in the country, The Interface Financial Group (IFG) is seeing record demand for its services. The company opened 20 additional franchises already this year and plans are in the works for another half dozen by year end.
How it Works
IFG Franchisees provide much-needed short-term working capital through invoice discounting. It’s not a loan and IFG franchisees DO NOT lend money. IFG franchisees purchase a percentage of their clients’ verified invoices at a discount. The small business client receives instant cash (capital) for the invoices within 2 -4 business days. Once the invoice is paid to IFG by the client’s customer the transaction is completed. This form of short-term financing offers small business owners the opportunity to access cash quickly without having to wait for their outstanding invoices to be paid.
“Small businesses are attracted to this model because they can get access to cash quickly, and the commitment isn’t permanent,” says David Banfield, president of The Interface Financial Group. “It is transactional, not a revolving loan, so the process can be repeated as frequently or infrequently as the business owner needs.”
Banfield adds the continued reluctance of banks and government agencies to finance small business had led to increased business leads for IFG franchisees. During the month of June, normally a slow business month, IFG franchisees recorded record invoice purchases. Banfield says the trend has continued into the fall, with entrepreneurs looking to open their own business as well as help other small businesses grow turning to IFG as their new business venture.
The State of Small Business
There are 27 Million small businesses in the United States; about six million of those are firms with 1 to 4 employees on a payroll. Source: U.S. Census Bureau, Statistics about Business Size.
The SBA’s lending programs grew in Fiscal 2011. See the information: Jobs Act Loan Incentives Led to Record SBA Loan Approval Volume,http://www.sba.gov/about-sba-services/7367/27101
12% of firms report unfilled openings. 10% report planning to add employees while 11% reports plans to downsize. The National Federation of Independent Business surveyed 1817 business owners. Read the report Small Business Economic Trends http://www.nfib.com/research-foundation/surveys/small-business-economic-trends.
IFG has been established for 40 years and is a major player in funding small business needs in the U.S. and six other countries. IFG has more than one hundred locations in North America and is consistently ranked one of the top franchises among Entrepreneur magazine.
About the Interface Financial Group
The Interface Financial Group (IFG) is North America’s largest alternative funding source for small business. IFG provides short term working capital funding in the form of a unique Invoice Discounting service. The company serves clients in the manufacturing, service and construction sectors. Interface operates from a base of more than 150 franchise offices in Australia, Canada, New Zealand, Singapore, the United Kingdom, The Republic of Ireland and the United States. IFG’s innovative Invoice Discounting service is a fast and easy way for small businesses to turn receivables into cash. For more information visit: www.interfacefinancial.com or contact IFG at 800.387.0860, firstname.lastname@example.org.