Factoring for the Oil & Gas Industry
Accounts receivable factoring for the oil and gas industry eliminates the stress of slow-paying customers. Access the steady cash your oil and gas business needs to move forward.
When cash flow is critical, many oil and gas companies generate capital quickly via accounts receivable factoring. Often, companies in the oilfield industry find themselves with dozens of outstanding invoices, which may take several months to collect on. During this time, oil and gas companies may lose money because they don’t have the necessary funds for operations such as maintenance and expansion. As a result, this form of oil and gas funding is a great financing alternative for businesses that need cash fast.
How Oil & Gas Factoring Works
Oil and gas accounts receivable factoring works by providing oil and gas companies with funds in exchange for a discounted value of their outstanding invoices. To elaborate, factoring companies typically purchase the receivables from a company, so the business may receive a portion of their outstanding oil and gas invoices immediately without having to wait for these funds to be paid. Once all invoices have been paid, the company receives the rest of their outstanding invoice funds minus a fee for the cash advance.
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Funding for Oil and Gas Companies
Many businesses in the oil and gas industry use oil and gas accounts receivable factoring to increase cash flow.
Here are a few reasons why a company may use oil and gas factoring.
- Maintenance
- Legal compliance
- Site preparation and expansion
- Cover payroll
- Obtain permits and licenses
- Purchase new equipment
- Accept more lucrative projects
Important Considerations of Oil and Gas Factoring
Factoring companies provide numerous benefits to companies that need oil and gas funding. Often, receiving funds involves a very short wait, and the process may be as simple as sending an invoice to a factoring company. While factoring is typically a great source of immediate income for companies that can’t afford to wait for an invoice to be paid, those in the industry should be cautious of paying high rates or fees. Factor Finders helps companies get in touch with quality factoring companies to avoid these issues. If your company is struggling to meet its financial obligations or pay for expansions, call Factor Finders today to get in touch with a factoring provider.