Oil and Gas Factoring Companies
Oilfield Factoring And Gas Factoring
Oil and gas production are a major part of the US economy and infrastructure. Found in everything from transportation fuels, plastics, solvents, to electricity and heat. The US extracts approximately 17 million barrels a day and the we lead the entire world in production, despite ranking only 9th in reserves held. For such a massive industry, many businesses experience long payment terms and often wait upwards of 90 days for payments to make their way downstream. Many companies turn to oilfield service factoring to assist with these delays and to keep their business growing.
The oil and gas industry encompasses many different types of businesses ranging from excavators, haulers, distributors, construction firms, suppliers, and manufacturers. All of these companies are in constant competition and will often accept longer payment terms to win business or contracts. Oilfield factoring companies have experience with all facets of these transactions and are familiar with payment terms ranging anywhere from 30 to 90 days.
How Does Oil and Gas Industry Factoring Work?
Depending on which part of the industry you’re in, an oilfield factoring company can cater their product to your company’s needs. Although operating like a general factor, they will often understand various intricacies of your specific industry. If you’re part of the construction side they can assist with paying your subs and suppliers. Hauling to or from an excavation site? An oilfield factoring company can assist with brokering loads and fuel cards.
The factoring process in the oil and gas industry is pretty straightforward once established. The factor will conduct an initial application and due diligence process. There is no cost or commitment required for this and once approved, the factor will then issue a terms sheet and factoring agreement. The oilfield factoring company will advance anywhere from 70%-90% of an invoice value and will be specifically listed in the terms sheet. Once a client signs off on those documents along with closing documents, invoice submission and funding can begin.
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Benefits of Invoice Factoring For Oilfield Service Providers
Factoring is a readily available solution to your cash flow crunch. Whether you’re waiting 30, 60, or even 90 days to get paid there is a oilfield factoring company for you. Check out some of these other benefits from the factoring companies we work with: