Invoice factoring is a unique form of financing that businesses depend on for consistent, working cash flow in the oil and gas industry. As owners and operators explore this option, they often wonder if they qualify for invoice factoring services. That’s why Oilfield Factoring would like to provide you with some standard information concerning the elements of qualification.
What is Invoice Factoring?
Invoice factoring is a simple process in which a business sells their open invoices to a factoring company like Oilfield Factoring. A factoring company will then pay an advance up to 90% of the value of the invoice. In most cases, this takes place within 48 hours of receiving and approving an invoice. Once an invoice is paid in full by a customer’s client, the remaining balance of the invoice minus a small factoring fee is then remitted to the factoring client.
Invoice Factoring Qualification
Unlike traditional financing, factoring is not a loan. Therefore, qualifying for factoring is different. When a company takes out a bank loan, their credit, payment history, and business plans are reviewed before a lending decision is made. This process can be time-consuming and lengthy due to the strict qualifications banks have for lending. Even worse, many small businesses can’t meet these conditions.
To qualify for factoring, however, it’s the credit and payment history of a company’s customers that are taken into consideration. If a company is working for and providing services to clients with strong credit and payment histories, then approval is often quite easy.
Do I Qualify for Invoice Factoring?
One of the main reasons oilfield businesses use invoice factoring is because factoring companies are very flexible when it comes to their customers. At Oilfield Factoring, we understand that business in the oil and gas industry has its ups and downs. However, we have plenty of experience helping companies in a wide variety of situations. These include startup businesses with less than perfect credit, tax and bankruptcy issues, and rapidly growing companies.
Get Started With Oilfield Factoring
For a free, no-obligation factoring quote and conversation to qualify for invoice factoring with Oilfield Factoring, contact us by filling out our online form or give us a call at 1.866.834.7338.
