If you have a business in the oil and gas industry, you’re probably aware that this industry has been thriving for some time (even throughout the recent recession years). This trend appears likely to continue long into the future. Over the course of the last several decades, the industry has grown at a steady to exponential rate. This means that people who work or invest in oil and gas businesses promise to enjoy success and security for many years to come. Companies are eager to explore new sites, and advancing technology and political advocates are facilitating this growth.
However, various shifts in the economy have led to an economically conservative approach on the part of clients in the oil and gas industry. Many clients prefer longer terms, and they may wish to make payments later than they might have in the past. Companies still get paid after they invoice clients, but such payments may not come quickly enough to meet the financial needs of those companies.
Overcoming the Trend of Delayed Payments
Since companies are ultimately paid by clients, they can safely continue their work in the field. Unfortunately, delayed payments can create problems for companies when they need cash flowing in to pay for such industry necessities as equipment, workers, and start-up endeavors. Funding exploration projects and research and development programs is also essential. The solution to a cash flow problem for such a company is as simple as obtaining a loan.
Applying for traditional financing via a banking institution is not always a feasible strategy for a company in the oil and gas industry. This is why invoice factoring is a practicable alternative for such businesses. Invoice factoring enables a business to access cash immediately instead of waiting a month or two for invoices to be paid.
How Invoice Factoring Works
The factoring process works more quickly and easily than most traditional methods. A business submits invoices to an invoice company. The factoring company pays that business cash for about 80% to 90% of the total value of the submitted invoices. Once an invoice has been paid, the factoring company pays the remaining balance to the business. The invoice factoring company charges a reasonable fee, which is taken out of the invoice balance.
Invoice factoring is a streamlined loan process that benefits everyone involved. If you run a business in the oil and gas industry, you might consider contacting a reputable invoice factoring company. You’ll get the cash you need immediately, so you can keep your business running as smoothly as it should.