Factoring for Oilfield Suppliers
Oil field suppliers need a steady flow of cash in order to be successful in the oil industry. Often, this may become a difficult task for oil drilling equipment suppliers since the industry standard of 30 to 90 day payment plans for invoices typically means waiting to get paid for several months. While traditional funding, via bank loans and investors, may help alleviate this problem, many businesses have exhausted their options in this area, may not qualify or simply don’t want to get into any more debt. As a result, funding oil field suppliers may be done using invoice factoring, so companies may continue their business activities and increase growth and profits.
How does Invoice Factoring Work for Oilfield Suppliers?
Invoice factoring is often used as a method of funding for oil & gas supply companies including frac sand suppliers. The financial practice provides oil drilling equipment suppliers with immediate cash based on a percentage of their outstanding invoices in exchange for a financing fee. Factoring companies often work with frac sand suppliers and other businesses in the industry that need to be paid immediately. Typically, most businesses qualify to receive up to 95 percent of their outstanding invoice totals within a 72 hour period.
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Benefits of Invoice Factoring for Oilfield Suppliers
The benefits of using invoice factoring as a method of funding oil field suppliers are listed below.
- Doesn’t require taking out a loan or new debt
- Most companies may receive up to 95 percent of their outstanding invoice dues.
- Quick turnaround with most companies receiving funding within 72 hours.
- Financing may be used to pay for necessary equipment and payroll.
- May lead to an increase in capital, growth and profits.
- Funding may be used to pay for required permits and licenses.
- May be used to cover necessary travel expenses.
- Companies with bad credit or no credit may qualify.
Funding for Oil and Gas Supply Companies
While using factoring as a method of funding for oil & gas supply companies is incredibly useful for businesses in need of a steady cash flow, companies should be wary and work with a reputable factoring company to ensure the best possible financial agreement and advancement rate. If your company is struggling with its current cash flow due to outstanding invoices, please call Factor Finders to get in touch with a quality factoring company that may provide capital within one to three days.