Factoring enables oilfield service companies to finance their accounts receivable. It improves their cash flow and provides funds to cover payroll expenses, supplier costs, and other essential expenses.
We offer factoring plans with competitive rates, high advances, and simple qualification requirements.
Commercial Capital LLC has over 20 years of experience financing small companies. For more information or to get an instant quote, call us toll-free at (877) 300 3258. We work with companies in the US and Canada.
How does factoring work?
Your invoices are financed in two installments. The first installment is called the advance and covers up to 90% of the invoice. These funds are deposited into your bank account shortly after you submit the invoice to the factoring company.
The factoring company deposits the remaining 10% (less their fees) once your customer pays the invoice. This second installment settles the transaction. Most companies use factoring regularly since it improves their cash flow and helps ensure you have funds to run – and grow – the business.
Learn more: read “How Does Factoring Work?”
The most important benefit your company gets by factoring its invoices is that your cash flow improves quickly. You don’t have to wait 30 to 60 days for your clients to pay their invoices. Additional benefits of factoring include:
- Allows you to extend payment terms to clients
- Take on new clients and grow
- Financial line grows with your company
- Quick deployment
- Simple qualification
Competitive factoring rates
Our rates are competitive and range from 1.15% to 3.5% per month for qualified oilfield service companies. Rates vary based on the line size and your client’s creditworthiness.
For an instant cost estimate, fill out a factoring quote form or call us toll-free at (877) 300 3258.
High initial advances
Getting a high advance is as important as getting a competitive rate since it provides immediate liquidity. Our advances for oilfield service companies range from 85% to 90%, though higher advances are possible in certain circumstances.
Will factoring help my company?
Factoring is designed to help oilfield services companies whose cash flow problems result from slow-paying invoices. You should be a good candidate for factoring if your:
- Main problem is that clients are paying slowly
- Clients have good commercial credit
- Invoices pay less than 90 days
- Company is free of major issues
- Simple qualification
Our factoring plans have simple qualification requirements. They are available to oilfield service companies that have a good client portfolio. Additionally, your company should not have:
- Liens against A/R
- Serious legal problems
- Serious tax issues (or be willing to work out a plan)
Types of companies we can help
We can work with many types of companies in the oil and gas industry, including:
- Oilfield trucking companies (water, frac sand, vacuum trucks, etc.)
- Oilfield services
- Testing services
- Welding services
- Tank/pipe cleaning
- Frac sand suppliers
- And more!
Partner with the right factoring company
Working with the right factoring company is essential to your company’s success. Keep the following in mind as you interview potential financing partners.
1. Do they understand the oilfield services industry?
You are better off if you work with a factoring company with experience in the oil and gas industry. They are able to offer the best terms and be familiar with the industry’s nuances.
2. How long have they been in business?
You are usually better off working with a factoring company with some longevity. Ideally, the company should have been through at least one economic cycle. This experience helps ensure they have a seasoned team to manage things when you need funds the most.
3. Can they provide references?
Ask prospective factoring companies for references. Interview these references carefully, as they will give you a good idea of how this factoring company operates.
Note that a factoring company will provide references only after they have had a chance to review your application. This screening process helps protect their clients.
4. Can they offer short-term contracts?
Financing has a cost, and it affects your profits. Consequently, you don’t want to be committed to a financing plan for any longer than you need to. You are better off if you work with a factoring company that offers short-terms plans (we do). Assuming that all works well, your company can always extend the plan as needed.
We want you to make an informed decision about working with us. To learn more about invoice factoring, visit the oil and gas section of our learning center. Popular articles include: