What is oilfield factoring? Oilfield factoring is a type of financing many companies use as a source for immediate cash. Sometimes called accounts-receivable financing or invoice financing, factoring allows companies to get immediate payment on their invoices, instead of waiting 30, 60, or up to 90 days for customer payment.
Oilfield factoring is a simple and straightforward process, here’s how it works:
Oilfield factoring can be extremely advantageous for a number of reasons. First, companies get paid immediately, giving them the cash and flexibility to operate on a day-to-day basis without having to wait for customer payment. Second, invoice factoring is not a loan, so businesses can have additional capital at their disposal without having to qualify for traditional lending or increasing their debt. This is because the cash provided by the factoring company is based on the credit of the company’s clients, not the company itself. Finally, factoring companies often have invaluable services that go beyond collecting invoices such as credit analysis and risk, treasury services, and discount programs and savings opportunities.
The need for cash is why most businesses enter into a factoring relationship. In addition to improved cash flow, value-added services from a trusted factoring company can strengthen the client’s business.
Since 1994, TCI Business Capital has provided best-in-class factoring services to thousands of small and mid-sized companies across the United States and Canada. We offer reliable cash-flow solutions enabling companies to meet the challenges and opportunities they face.