Oil and Gas Factoring: The Best Financial Solution
If you are looking for ways to finance your oil and gas company, invoice factoring is the most popular and widely used options for gaining the quick cash that you need. Businesses that have accounts receivables benefit from invoice factoring because they can receive the fast cash they need.
How It Works
Bank loans are often hard to come by and take a long time to receive. Because it is difficult to obtain bank loans, numerous oil and gas companies are finding financial solutions in factoring. With oil and gas factoring, you can receive an advance for your outstanding invoices at up to 96%. Rather than waiting for 60 or 90 days, the factoring company will pay you within 24 hours of approval. A huge benefit of this type of financing is that your company will no longer need to worry about the collections process. Once you have that cash it is yours to manage how you need.
Top Benefits of Oil and Gas Factoring
Oil and gas companies use factoring because those are the companies that achieve fast growth within their industry. If you are interested in quick growth and success, take a look below at numerous benefits of oil and gas factoring.
1. Retain a healthy cash flow with invoice factoring
Many business owners will agree that a steady cash flow is the lifeline of your business. Without a consistent cash flow, you may have to turn down projects, which stunts your growth. Yet, with factoring you don’t have to wait for that money and can retain a reliable cash flow to continue your operating even when your clients are slow about making their payments.
2. Buy new equipment and supplies with invoice factoring
With any growing and successful oil and gas business, the purchase of needed equipment is essential to continue that growth. Yet, if you’re waiting on invoices to be paid then your cash flow may not be reliable. To help solve this problem, many turn to factoring. Rather than delaying a drilling project, business owners can take the funds from factoring and use it get the equipment or supplies needed.
3. Ability to support season and sales fluctuation with invoice factoring
Whenever your company faces a slower season where the cash flow isn’t as consistent this can put a strain on your business. Even though the gas industry is growing, there are slower times when the cash flow isn’t as consistent. When this happens factoring can help you:
- Buy supplies
- Make payroll on time
- Pay any outstanding bills
- Expand your company
4. Bid on new projects with invoice factoring
Without a reliable and consistent cash flow you won’t be able to support growth. If you are looking to expand and have the steady cash flow you need to bid for new jobs, invoice factoring is the best solution.
5. Work your way out of debt with invoice factoring
A huge benefit of factoring is that it won’t put your business in debt like a loan. In fact, it can actually help you work your way out of debt and establish better credit. Because this industry is quickly growing, competitive and high paced, it is only natural that many companies get into debt. If you want to bypass the risk of hurting your credit, factoring is key.