Oilfield factoring: Oil and gas industry factoringPosted by Rowe Beach on February 23rd, 2021 Whether you operate downstream, midstream, or upstream, you can count on oilfield factoring to keep your cash flowing. Long payment terms are standard in the oil and gas industry, making it hard for oilfield service providers to maintain a steady cash flow. Rather than stressing over whether you have enough funds to pay your employees, purchase equipment, or cover research and development costs, use accounts receivable factoring to maintain a stable source of capital. How does oil and gas factoring work? The oilfield factoring process is straightforward and works in 4 steps. First, the oil and gas company must provide a factor with a copy of the invoice sent to the client. Then the factor verifies this invoice and runs a credit check on the client. The factor will then advance a portion of the outstanding amount to the oil and gas company. Once the invoice is paid, the factor will then send the rest to the oil and gas company minus the discount and any other additional fees. The discount and additional fees are the cost of factoring. oilfield factoring company Oil- and gas factoring provides fast financing for oil and gas companies by turning receivables into cash. This type of funding helps oilfield service providers take on new growth opportunities by eliminating the wait for payment. If a lack of working capital prevents you from going after a lucrative project, oilfield factoring companies will get your business the funds you need. Factoring is a business-friendly alternative to traditional lending for the oilfield industry.Like it? Share it! |