The Interface Financial Group Offers Ailing Construction Industry Assistance via Construction Factoring

BETHESDA, MD--(Marketwire - May 29, 2009) - The Interface Financial Group (IFG), North America's largest alternative funding source for small business, offers construction factoring services so that builders and contractors can weather the economic storm during the declining home construction. One of the latest financial trends is an increase in factoring, which is providing contractors with the ability to have cash flow to pay suppliers and to meet payroll.

According to the May 26 report from Standard & Poor's/Case-Shiller 10-City Composite Home Price, prices dropped 18.6 percent from a year ago in March, which is about a percentage point less than the record decrease of 19.4 percent two months earlier in January. Another report showed that home construction continued to decline throughout the state of California in April, with permits down 52 percent from a year ago and 12 percent from March, according to the Construction Industry Research Board. The number of mortgage default notices issued to California homeowners, often leading to foreclosures several months later, reached record levels in the first quarter, up 19 percent from a year earlier. (Source: MDA DataQuick Research.)

The tightening of credit markets has taken its toll on the construction industry. 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.

"Contractors have special needs because they often do not get paid for up to 90 days after the job is completed," said Jan Cunningham, vice president, Interface Financial Group, Inc. "By advancing up to 90 percent against invoices, construction factoring is often a contractor's saving grace to stay in business. Factoring is an extremely quick way to turn a company's receivables into cash rather than waiting up to 90 days for an invoice to be paid. Factoring companies like IFG will look at your customers' credit rather than yours."

Developers used to rely on borrowing money from banks that usually require securing assets for a loan. They have to meet monthly payments in order to pay off the loans, and for many construction contractors, cash flow to be able to pay the loans is the challenge.

Factoring is different from a bank loan in several ways. 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 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.

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