NAPLES, Fla. - June 20, 2014 /PRNewswire-iReach/ - Many small business owners are victims of their own success. The story goes like this. An entrepreneur started his own business about 18 months ago. Initially he used his savings to finance the startup and then his pension fund that he accumulated while working for someone else.
It was fairly slow going at first but in the past 7 or 8 months business had picked up and he's getting orders on a regular basis. The he realized that as his business grew he needed more working capital to fuel the growth. At one point he resorted to financing some business purchases with credit cards and then found himself with some large credit card debt.
His next step was to go to his bank. It seemed a reasonable next step to him, after all although his business was fairly new he had good, steady receivables and his business was growing.
The bank didn't agree. According to the bank, he didn't qualify for any of their programs because he didn't have an acceptable trade history and, of course, his financials didn't meet the bank's criteria. They suggested he slow down his expansion plans, reject some of the orders, and basically maintain his business at a lower level; and they told him that most banks would take the same position as theirs.
They did have an alternative suggestion though – they suggested that he should explore the secondary finance marketplace. They talked about such things as factoring, purchase order financing, invoice discounting and venture capital. He didn't know too much about any of these areas so he did the research and found out that he was too small for the factoring companies, and apparently he was not well suited to using purchase order finance as a growth approach. The venture capital people that he spoke to all wanted a business plan, several years' financial statements, cashflow projections and more, none of which he had.
It turned out that invoice discounting —a service he had never heard of was the only viable solution.
"That's how many of our clients arrive on our doorstep — either through patient research or because their bank recognized their need and IFG's ability to help and made the introduction." explained Charles Raskin, owner of the Collier County office of The Interface Financial Group. "In the current economy many small- and medium-sized businesses will become victims of their own success. They can create the product or service, they can deliver it, but as the order book grows they can't finance the growth and either have to slow down or go out of business."
Invoice discounting allows small growing companies to effectively turn their business into a 'cash-on-delivery' situation. Once the cash flow is accelerated, the growth of the business can easily be handled and financed.
"With services such as invoice discounting there are options to help small businesses climb to the next plateau, and continue supporting the local economy." Charles Raskin said.
The Interface Financial Group (IFG) is the leading alternative funding source for small business. IFG has been providing short-term working capital funding in the form of a unique Invoice Discounting service since 1972. The company serves clients in the manufacturing, service, and construction sectors. Interface operates from a base of franchise offices in the United States, Canada, Australia, New Zealand, the Republic of Ireland, Singapore, and the United Kingdom. IFG's innovative Invoice Discounting service is a fast and easy way for small businesses to turn receivables into cash. (www.interfacefinancial.com/oldevic/)
SOURCE Interface Financial Group
Interface Financial Group
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