BIRMINGHAM, WEST MIDLANDS--(Marketwire - Sept. 27, 2012) -
Editors Note: There is a photo associated with this press release.
The Interface Financial Group (IFG), North America's largest alternative funding source for small businesses, announced that the company offers support to small businesses that are struggling with raising capital to fund growth prior to economic recovery. IFG provides short-term financial resources including debtor factoring, invoice discounting, construction factoring and invoice factoring to companies in the UK, Ireland, United States, Canada, Australia, New Zealand, and Singapore.
Business Secretary Vince Cable has announced the first steps in creating a government-backed business bank, including new government funding of £1bn. The bank will aim to attract private sector funding so that when fully operational, it could support up to £10bn of new and additional business lending.
He has confirmed that the government will build a single institution that will address long-standing structural gaps in the supply of finance as identified in Tim Breedon's report on non-bank finance. It intends to bring together government finance support for SMEs and to unlock institutional investment to benefit small businesses.
The big question is will this initiative work, where so many others have failed? And will it reduce or enhance the good work being done by the invoice finance funders who are supporting businesses where the banks can't or won't?
The announcement comes at the same time that the latest figures from members of ABFA (Asset Based Finance Association) who include major banks and independent providers, show yet another rise in the take up of invoice finance through either invoice discounting or factoring.
Comparing figures to the same quarter last year, the total number of businesses using asset-based finance has risen by 4%, pushing numbers up towards 43,000. Invoice discounting remains the most popular form of asset-based financing, with the number of companies using it increasing to well over 18,500, up from just over 17,300 in the same period last year.
ABFA reports that there were total advances to businesses of £16bn, an increase of 2% on the same quarter last year. There was also an increase of 4% in total funding available rising from £22.5bn to £23.3bn for the same period. However, the tough business conditions that have continued to prevail in the UK and Ireland are reflected in the total sales figures of clients which show little change to the same period in 2011.
Paul Barnsley, chief operating officer for The Interface Financial Group (IFG) said: "I am not convinced that this new bank will be able to serve the businesses it intends to as some of the same restrictions that currently face the lenders will still be in place, we speak to and fund, a lot of construction companies with our specific construction factoring facility, who currently have little or no choice from other funders, so will they be catered for? Also the increase in the popularity and usage of funds via invoice finance providers goes to prove just how accessible and beneficial businesses see it. The biggest challenge is still awareness and reputation, which we are working hard on."
"I do hope this new Bank helps because businesses need it to, but with a 23% growth over the past year in advances to companies with less than £500k turnover, it is particularly pleasing to see that the invoice finance industry is supporting the UK's economic growth by offering increased financial support to these micro and start-up businesses. I believe that this will continue and that the growth of funding from factoring & invoice discounting will also continue to grow."
About The Interface Financial Group (www.ifgnetwork.co.uk)
The Interface Financial Group (IFG) provides short-term financial resources including invoice factoring (invoice discounting). IFG launched the UK operation in 2010 following the success of its New Zealand, and Australia businesses which launched in 2004, and 2006. IFG's innovative products also includes spot factoring - the purchase of a single invoice or number of invoices. IFG does not require the whole debtor book.
The IFG Network is the funding arm of The Interface Financial Group providing capital and transactional support to IFG's international office network. IFG has grown to over (150) international offices in the UK, the United States, Canada, Ireland, Australia, New Zealand, and Singapore. Each IFG office is managed on a local level, providing immediate service to clients with local knowledge and experience. This makes IFG unique to all other Factoring Companies in the UK. The IFG team has substantial business experience and expertise in numerous diverse areas, including accounting, finance, law, marketing, banking, etc.
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