Contact Information: Media Contact: Kristin Gabriel MarCom New Media T: 323.650.2838; E: Headquarters: The Interface Financial Group, Inc. 7910 Woodmont Avenue, Suite 1430 Bethesda, MD 20154 T: Toll Free: USA; 877.210.9748; Canada; 877.340.6893
The Interface Financial Group Says Accounts Receivable Factoring for Construction Industry Is up 40 Percent
Invoice Factoring Is One of the Hottest Trends in 2009, Allowing Small Businesses to Obtain Funds Based on Current Accounts Receivables
| Source: The IFG Network, Inc.
BETHESDA, MD--(Marketwire - January 14, 2009) - The Interface Financial Group (IFG), North
America's largest alternative funding source for small business, says that
its factoring business in the construction sector was up by
40 percent in the fourth quarter of 2008. The recent tightening of credit
markets has been especially hard on the construction industry. Along with
industry trends such as sustainable building, there are changes in building
code standards that are affecting the industry. The economy and the lack of
consumer confidence promise to make 2009 a challenging year for
contractors.
Since contractors and subcontractors have certain rights under construction
laws in each state involving guaranteed payments for labor and material
providers, one of the latest trends emerging is an increase in using
factoring, which provides contractors with cash flow to meet payroll and
pay suppliers.
Single 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 Comp. and more. Factoring allows businesses to obtain funds based
on their current accounts receivable -- the money they expect to have
coming in.
"Contractors have special risks, costs and billing challenges and many
factoring companies do not have programs for these industries," said Jan
Cunningham, vice president, Interface Financial Group, Inc. "IFG
specializes in single invoice factoring and benefits firms that do not get
paid for 30, 60 or 90 days by advancing up to 90 percent against invoices."
Invoice factoring is when a business sells its accounts receivable invoices
at a discount. Factoring is different from a bank loan in several ways.
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. Bank loans
involve two parties, while factoring involves three parties.
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.
"IFG's service has been great. We are finding the services and the process
IFG offers has been everything and more," said Crystina Bass, vice
president, BAT Construction Group, LLC.
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 spot 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.