New funding stream set up for SMEs

A US-style funding programme designed to help small business get access to finance has set up in the West Midlands.

The Interface Financial Group, set up in the US 40 years ago, provides working capital directly as needed. The ‘money-as-you-go’ approach is designed to help companies struggling to attract finance from conventional sources.

IFG is the largest alternative funding source for SMEs in the US and has more than 100 offices across the country together with Canada, Singapore, New Zealand and Australia.

Hagley-based David Pearce is the Area Developer appointed for the West Midlands. He said: “More than ever small businesses need quick access to cash, particularly in the current climate. But many firms find it hard to get the help they need from banks and financial institutions.

“Factoring companies represent a way around cash flow issues, but these usually involve long term contracts, large set up, and management fees where customers are tied in for a specified period.”

The IFG system is designed to be flexible and does not involve contracts or long-term commitments.

“The big advantage for customers is they know exactly from the very start precisely what they will pay, no hidden extras or small-print clauses,” said Mr Pearce.  

“It is a very simple formula that our clients can use as a one-off when they need quick access to some funding, or as a use-as-you-need service. We find in many cases transaction times can be executed in just 48 hours, considerably faster than most conventional funders.”

Mr Pearce, who has more than 25 years experience in business development, said: “Factoring and invoice discounting in the UK is worth around £15bn a year. At IFG, which is privately owned, we are looking at no more than a modest slice of that, just a few percent, but our customers will in the main be people who may struggle to get ready cash unless they are tied in to a contract, or where there is a short term need for cashflow.”