An independent finance company has announced a £50 million fighting fund to help small and medium-sized businesses in Sussex weather the recession.

Close Invoice Finance (CIF), which has an office in Hove, is offering finance to firms across the South East who may be struggling to get money from their banks because of the credit crunch.

Invoice finance allows companies to raise cash quickly and easily against their sales ledger, freeing up finance to make further purchases.

Andrew Curry, commercial director of CIF in the South East, said: “In the current economic climate, as traditional sources of funding disappear, small businesses are at most risk of failure due to cash flow problems. Banks are failing to move quickly to help the SME sector, the very backbone of our business community.

We hope our £50 million fighting fund will help businesses take advantage of an alternative, more flexible source of funding.”

Malcolm Simmons is managing director of Allen West Brighton Ltd, a manufacturer of industrial electrical control equipment based at the Meridian Industrial Estate, Peacehaven.

He and colleagues took over the business after a management buyout two years ago and have used CIF ever since.

Mr Simmons said: “Once we bought the company we needed finance to provide us with cashflow to run the business.

CIF pays us 85% of an invoice as soon as we make a sale, which allows us to buy materials for the next job.”

The remaining 15%, minus a small percentage paid to CIF, is paid when the customer settles their invoice.

Mr Simmons said: “The advantage over a straightforward business bank account is that they do not provide you with money up front. Also, if we have customers we have never dealt with before, CIF provides a service similar to a credit check. It also provided us with a type of overdraft worth £50,000 when we took on a massive project in our first year and needed to buy materials.”

Mr Curry added: “We are is interested in the integrity of debt, not the company balance sheet or rate of growth. This means we approach businesses in a very different way to traditional lenders such as banks who are focused on more obvious indicators of business success.”