Oilfield Factoring Benefits

Any welding service company can tell you that everything in the oilfield moves fast. Everything, except payment cycles. Oilfield welding service companies in Texas or North Dakota often wait as long as 60-90 days before they receive payments from their customers. That length of time can make it nearly impossible to manage cash flow, especially for start-up companies.

The best way to generate working cash flow in the oilfield services industry is through invoice factoring. Also known as accounts receivable financing, invoice factoring turns your outstanding invoices into cash within 24 hours or less. This helps welding service companies generate the working capital they need to catch up on payroll, bills, and purchase any necessary equipment to keep up with their business. Keep in mind that welding companies who operate with invoice factoring are able to grow and expand their operations at a much quicker pace than those who don’t.

That’s why Oilfield Factoring would like to provide you with the following key ways invoice factoring can help you maintain and grow a successful business.

Fast Payments

Factoring allows your welding company to receive payments for services almost immediately. An oilfield invoice factoring company buys your invoices by withholding a small fee for assuming the collections risk, then advances you cash on your invoices in less than a day. While some oilfield service companies generate cash flow through Quick Pay financing, these payments can take 3-7 days to process. Invoice factoring, on the other hand, takes less than 24 hours. Not to mention the fees for Quick Pay are often higher and not a viable solution for everyone.

Easy Set-Up

It can take several weeks or months to get approved for a line of credit through traditional bank loans or other lenders. With invoice factoring, however, you can set up an account and start receiving cash for your oilfield welding company in less than a week. Another great advantage of invoice factoring is that companies with less than perfect credit can qualify for financing. An invoice factoring company like Oilfield Factoring is more concerned about your customer’s credit and payment histories than your own. Furthermore, invoice factoring isn’t a loan. This means your company won’t have to worry about assuming any debt when you factor.

Back-Office Services

In addition to boosting the cash flow of your oilfield welding business, invoice factoring can take a ton of work of your company’s shoulders. In fact, an invoice factoring company like Oilfield Factoring can provide you with a wide range of back-office services including customer collections and free credit analysis. This provides you with a level of service that helps streamline the collections process for your company and customers. We understand that collecting payment in a prompt, professional manner is in the best interest of everyone.

Furthermore, the back-office services you receive can make a real difference to the bottom line of your company. You won’t have to worry about spending time and resources on collections, thus allowing you to focus on more important things when it comes to running and expanding your oilfield welding business.

Scalable Funding

Since invoice factoring is more flexible than traditional bank loan financing, the amount of money you finance will grow as your receivables grow. This means that the funding you need will never run out. For example, if your company’s monthly invoice volume increases from $200,000 to $600,000 in a year’s time, invoice factoring will be able to help fund that growth.

Oilfield Factoring

There’s no shortage of funding options available to oilfield companies looking for financial solutions. However, it’s important to weight the pro’s and con’s of each available option and take the time to consider what invoice factoring can do for your company. At Oilfield Factoring, we’ve worked with thousands of businesses just like yours to provide them with the funding and back office support they need to maintain and grow their oilfield service companies.

Ultimately, it’s important to consider these top four benefits to help you determine whether invoice factoring is right for your oilfield welding business. For more information about the invoice factoring services we provide, contact us by filling out our online form or call us at 866.834.7338 today.