Since 2007 Oilfield Factoring has been providing oil and gas service companies with an alternative to conventional bank financing. Many banking institutions are not able to qualify clients for the essential funding they need to operate their business. Their strict terms and rigorous credit requirements cause many oilfield service companies to look elsewhere for the cashflow they need. That’s where we’ve stepped up, funding hundreds of millions of dollars in invoices for our oil and gas clients, from water haulers to fac sand trucks to pipe welders and roustabouts. Many businesses that are unable to secure funding through traditional means are often able to obtain funding through invoice factoring. A high-quality invoice is the main basis upon which a factoring decision is made, as well as the creditworthiness of your customers.
We’d like to provide you with the following information about how simple and cost-effective factoring is, so you can get the cash you need to fulfill your essential business obligations and ensure your companies long-term viability.
Factoring for the Oilfield Industry
Factoring is often referred to as invoice factoring or oilfield factoring. Oil and gas service companies commonly use factoring as an essential financing tool. Businesses generally offer payment terms to their customers, rather than require full payment at the time of service. There are many good reasons for this business practice. These include increasing the amount of customers and developing long-term relationships. When these transactions take place, a service company is left with an account receivable that it must wait on until a customer pays, turning it into cash.
Factoring is very straightforward when it comes to getting the cash you need to run your business, while still being able to extend payment terms to your customers. As a service company, you will sell your accounts receivables to a factoring company like Oilfield Factoring in return for an immediate cash advance between 80-90% of the invoice amount. When this happens, your client will be notified that the invoice has been sold, and is directed to make payment directly to the factoring company. We will then keep track of the receivable, deduct a small factoring fee from the proceeds, and provide you with the remaining balance once the payment has been made. This, in turn, provides you with consistent cash flow to run and manage your business. At Oilfield Factoring, we know we are acting as an extension of your company, and you are trusting us with the responsibility of collecting your invoices and communicating with your customers. As such, we are extremely professional, considerate, and understand your industry.
How Factoring Helps Oilfield Service Companies
When you are unable to wait 30-90 days to get paid for your services, Oilfield Factoring is here to help. We will pay you up to 90% of your invoice amount immediately, providing you with the money you need to meet payroll, pay suppliers, and grow your business. We even help with back office services such as credit checks, billing, collections, and more.
Oilfield Factoring is committed to funding oil and gas service companies and would like to provide you with the following resource, Ultimate Guide to Invoice Factoring.
The Benefits of Factoring
- Fast approval & immediate funding in as little as 24 hours.
- Receive up to 90% of your invoice advanced.
- Minimal factoring fees ranging from 1.5% -3.5% of the invoice
- Keep all expenses like payroll, fuel, maintenance, and insurance current.
- Increase working capital and take advantage of growth opportunities.
- Receive credit and collection management services.
Oilfield Service Companies That Qualify
- Water Haulers
- Rig Movers
- Mud Haulers
- Gravel Haulers
- Hot Shots
- HazMat Hauling
- Frac Sand Haulers
- Vacuum Trucks
- Equipment Haulers
- Flatbed Carriers
- Crude Haulers
- Pipe Haulers
- Roustabouts
- Welders
- Fence Installation
- Rig Cleaning
- Trenching
- Well Cleaning
- Location Cleaning
- Sandblasting
- Salt Removal
- And More…
Oilfield Factoring
At Oilfield Factoring, we help oil and gas service companies by providing them with proper factoring services to supplement their growth and ease any associated cash flow difficulties. For more information, contact us by filling out our online form or give us a call at 1.866.834.7338 today.
