What is Oil and Gas Factoring?
If you provide services in the oil and gas industry, now is the time to boost your cash flow to take on new projects. The energy industry is making a comeback, are you ready for it? Invoice factoring helps oil and gas companies by providing steady working capital for every step of your operation.
Invoice factoring for oilfield service providers is a financing alternative that helps oil and gas companies providing upstream, midstream, and downstream services. Nearly any business in the energy industry qualifies for factoring. It doesn’t matter if you’re a supplier, hauler, contractor, distributor or another type of service provider – we’re ready to help you secure the funds you need today.
The Oilfield Factoring Process
With oilfield factoring you can submit your unpaid oil and gas invoices and receive up to 95% percent of their value within 24 hours, allowing you to purchase equipment and cover other critical expenses without waiting for payment from your clients.
For fast funding of your oil and gas invoices, simply go through the steps below as often as you need to access working capital:
- Complete your service for your client
- Send the oil and gas factor your open, accurate invoices for work performed.
- The factor will verify your invoices and advance you up to 95% of the value within 24 hours.
- Continue operating as usual; the factoring company will collect directly from your customers.
- When the invoice is paid, the factor will send you the rest of the invoice value minus a factoring fee.
To get started you’ll need to complete an application and include the following documents: a customer list, a current invoice aging report, Articles of Incorporation and copies of the invoices you wish to factor.
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Invoice Factoring Benefits the Energy Industry
With competitive rates and approval in as little as 3 to 5 business days, oilfield factoring programs are designed to work seamlessly with your existing business structure and transform your accounts receivable into immediate cash.
Credit reports, collections, and online reporting are all services that your factoring company can provide to you at no additional charge. Invest your resources in building your client base and completing projects with confidence that you are working with the most reliable customers.
Supplier Discount Opportunities
Having available cash means you are in a better position to negotiate discounts with your suppliers and creditors – either for early payment or larger-volume purchases.
Extend Better Credit Terms to Your Clients
Because factoring ensures you’re paid within 24 hours for jobs you’ve completed, you’ll be able to offer more competitive payment terms to potential clients.
If your business is new or recovering from credit issues, you can still qualify for a factoring program to turn things around. Oil and gas factoring companies base their funding decisions on the creditworthiness of your customers in order to better serve businesses with less than stellar credit ratings.
Funding with No Limits
There are no maximum financing amounts. If you have outstanding invoices, you’ll be able to secure the cash. On the flip side, there are no minimum volume requirements to meet either. This way, you decide on the frequency that works best for your business. Factor only the clients you wish to factor.
Is Oil and Gas Invoice Factoring Right for Your Company?
Why let the work dry up while you wait for payments? Invoice factoring for oil and gas will give you the cash you need to keep projects going. Factoring is ideal for small to medium-sized oilfield businesses. Even if you’re just starting out, you can secure financing through factoring.
If your company is tired of waiting for slow paying clients, factoring can help. Factoring oil and gas receivables works for energy companies experiencing the following:
- Slow paying clients that strain your working capital
- Seeking additional capital to take advantage of new opportunities
- Wish to extend longer credit terms to attract new clients
- Fluctuating sales patterns due to seasonal trends or other factors
- Managing rapid growth in your oil and gas business
Factoring Services for Oilfield Transportation
Oilfield trucking companies are in demand, especially as fracking growth continues. Transportation factoring helps oil and gas haulers keep their trucks rolling to keep the oil production flowing.
- Dump Trucks
- Hot Shot Trucking
- Frac Sand Haulers
- Flat Bed Carriers
- Water Haulers
- Mud Haulers
- Crude Haulers
- Gravel Haulers
- …. and more!
Additional Oil & Gas Industries Served
Companies performing a wide variety of functions can use invoice factoring for oil and gas sectors to close the cash flow gap. Some such companies that benefit from oil and gas invoice factoring include:
- Site Preparation
- Pipeline Construction
- Site Preparation
- Disposal Wells
- Gravel & Frac Sand Suppliers
- Flowback Testing
- Vacuum Truck Services
- Wireline Services
- Cleaning Services
- Environmental Services