Invoice Discounting - Interface Financial

ARTICLES ON INTERFACE

Interface Financial Corp

Quality franchising is rooted in complementary relationships, and Interface Financial Corp reflects that theme throughout its growing organization. It is the company's sense of community and focus on the needs of small business owners that make it work efficiently.

The main ongoing issue facing the majority of small business owners today is the perennial problem of how to make the cash flow stretch to accommodate the growth plans. This problem is nothing new, it has been prevalent for a long time, and yet there are still only a very few viable financing methods available for businesses.

When we think of financing and capital for expansion, the natural tendency is to approach one's bank for assistance. Unfortunately, there remains an ongoing reluctance among the banking fraternity to offer loans to small businesses requiring $20,000 - $50,000. In the main, the reasons seem to be two-fold.

First, banks are "equity" lenders and expect their customers to have established some equity in the form of capital and retained earnings before the bank can accommodate their needs. By its very nature, small business is usually undercapitalized. Most of the companies requiring this level of financial help are not likely to have been in business for more than two or three years, and therefore, are at a point where they are just becoming profitable. Banks do not usually look favorably on these situations. Second, for banks to make small business loans, they must do so on a profitable basis. Lending $10,000 to a small business probably has the same administrative costs to the lender as lending $100,000 - $200,000. It is natural therefore, that the lender will choose the larger opportunity.

Where does all this leave the small business owner?

If all business were conducted on a "cash and carry" basis, there wouldn't be a problem in funding growth, but business is not that simple. Customers expect, and even sometimes "demand" terms on their purchases, usually 30 days. That often extends to 45-60 days and the problem is compounded by reluctance by many business owners to call and ask for payment. The bottom line is that businesses tie up valuable working capital in passive accounts receivable.

Enter John Sheehy and David Banfield, founders of the Interface Financial Group. After studying the cash flow problem described above, they created and then began franchising a financial service known as "Invoice Discounting." This service immediately turns quality, current accounts receivable into cash for the supplier. Their business becomes "cash and carry".

This is not "factoring," a system that generally includes all receivables, minimum sales levels and administration of the collection process. With the Interface program, those features are not present. Instead, this unique franchise operates on a "use it as you need it" arrangement designed specifically to act as a bridge in meeting the needs of small businesses during their formative years.

The system is both cost effective and very user friendly as Interface franchisees will attest. When the bank says NO or NO MORE, there is no need for the business owner to give up - they can contact one of the many North American Interface franchised locations and investigate their growth potential working with a professional invoice discounting service.