Our latest infographic explains the benefits of oil and gas financing and how factoring provides dependable and consistent cash flow to cover the many costs related to the oil and gas industry.
Note: Full graphic transcript and embed code is provided below.
Oil and Gas Financing to Fuel the National Energy Boom
Excavating shale oil and gas is expensive and requires loans to pay for:
- Pipelines, construction equipment, trucks, and materials
- Payroll for engineers, managers, operators, roughnecks, riggers, roustabouts, haulers and others
- Drilling and use permits as well as project bids
Cash Flow Snags Solved by Oil and Gas Financing
The oil and gas sector – particularly from shale deposits – is booming. Recent reports estimate that 9.35 trillion cubic feet of natural gas was produced from shale alone. With this type of rapid growth, cash flow troubles are ever-present causing a frustrating, stop-and-go production pace. However, with oil and gas factoring no one has to wait to get paid, which means pipelines are constructed, drills are built, trucks are loaded and project deadlines are met.
Benefits of Oil and Gas Factoring Include:
- Oil and gas financing in 24-48 hours – never slow production again or send your workers home because of insufficient capital
- A simple application process that can be completed in less than an hour
- Dramatically improve your business cash flow – once you start factoring receivables, you can depend on regular, consistent payments to better grow your business
- The outsourcing of your collections duties so you can focus on what matters most for your business
How Does Oil and Gas Funding from Factoring Receivables Work?
- Instead of waiting 30- or 45-days to collect on an invoice from your client, collect up to 95% of the face value in 24 hours.
- Use the payment as you see fit — pay your bills, cover payroll or bid on an upcoming project.
- The client remits payment to the factoring company.
- Your business collects the remaining balance minus the fees.
Tired of Waiting for Oil and Gas Loans from a Bank?
- Rapid Growth – Banks are generally not equipped to provide fast financing. Oil and gas factoring companies, however, understand the pace of the energy sector and can respond accordingly.
- Flexible Terms — With invoice factoring, there are no long-term commitments. Use factoring services for one month, 6 months, or 12 months. It is completely up to you.
- Available to Most Businesses – If your customers are creditworthy and pay their bills on time, then you probably qualify for financing.
Oil and Gas Factoring Readies Its Coffers
A recent conference discussed the lack of sufficient oil and gas funding, and how this threatens industry development. Commercial financing companies such as factoring are preparing to meet this growth head-on. Consider the following fast-facts about the state of shale oil and gas:
- According to the American Petroleum Institute, hydraulic fracturing and drilling will account for nearly 75 percent of natural gas development in the future.
- In 2012, the production of shale oil and gas provided more than 2.1 million jobs in the U.S., according to a recent report by ISH.com, a global energy information company.
- Though there are too many to count, major shale oil and gas formations are found in Colorado, North Dakota, Texas, New York, Pennsylvania, Ohio, and West Virginia.
- Hydraulic fracturing accounts for an additional seven billion barrels of recoverable shale oil and gas, according to a report by the Independent Petroleum Association of America.
- The International Energy Agency predicts that the U.S. will produce more oil and gas thanks to shale than Russia and Saudi Arabia by 2015.