Invoice discounting is not suitable for every company, but for the majority, it requires common sense rather than financial acumen to realize the best way to create improved cash flow in recessionary times is to spread the risk. Invoice discounting is an opportunity to get the best of both worlds by using a bank and an invoice discounter. It doesn’t mean turning your back on your bank or your bank manager.
Why is having alternative sources of financing relevant now? Because, when all the cost cutting or spending in response the current economic difficulty is over, companies with sales-related funds will be ready to move forward. The astute realize they must have a cash surplus to finance the increasing needs of the business as it comes out of recession.
Alberta has seen the boom-bust cycle many times, but the world has changed, especially in the Middle East. No one can foresee the price of oil with all the geopolitical uncertainty. It is also difficult to believe the current government could raise corporate taxes, increase the carbon tax from $15 to $30, and create further uncertainty and more job losses with a royalty review.
The Interface Financial Group is there for oil and gas service companies. We made a strategic move a few years ago to become the only spot factoring company in North America to assist subcontractors in the construction industry, which will enable us to ride out the uncertainty as well.