Factor financing your Oilfield Receivables for immediate cash can speed up company growth and ensure you stay operating strong. If your company is facing financial hardship due to slow paying accounts then factoring may be the answer.
IS YOUR MONTHLY CASH FLOW GOOD:
Oil and gas clients typically pay their invoices within 60 days. This is industry standard and is required by most large companies. However, smaller oilfield service companies do not plan on waiting so long to be paid and their business can suffer and even end very quickly.
Some of the smaller companies offer their customers a discount in exchange for faster payment. The term is early payment discount to customers willing to pay in 10 days or less. While this strategy may work in the beginning it has one serious drawback; it puts your customer in full control of your cash flow. And if your customer returns to their slow payment habits, your business could find itself in big financial trouble.
A BETTER ALTERNATIVE FOR YOUR BUSINESS:
You can take back control of your cash flow by accelerating your revenues using invoice financing. You’ll receive quick payments by financing your open invoices. Your business is advanced a large portion of your outstanding accounts receivables by the Factor, which provides your oilfield service company with immediate cash flow it needs to pay bills, reduce liability and continue to grow.
You don’t need to offer your customers a discount anymore. Your customer pays in full on their usual 45-60 day schedule, they don’t need to pay sooner, which means no more discounting your services.
Your company will get the financial flexibility it needs so you can take on new customers and focus on growing your business every day, not worrying about slow paying or no paying customers.
QUALIFICATIONS FOR OILFIELD INVOICE FINANCE:
Since you are financing your Accounts Receivables, its important that your customers have good commercial credit. Your Factor is going to do their due diligence to make sure you’re working with well established customers that pay their bills.
Some additional criteria a Factor may look for in qualifying your Oilfield Service Company for financing are; Your invoices must be unencumbered by liens, The owners and managers should have oil and gas industry experience, The company should not have an ongoing legal problems, The company should not have any serious tax issues and you must only invoice for delivered and accepted services and products.
Make sure you get a few offers from trusted Factors. Download Factor App, snap a picture of a current invoice, list the amount of the invoice and click submit. You’ll have a few qualified and industry leading Factors competing for your business.
If you’re not shopping your invoices, you’re not getting the best deal when Factoring!
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