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Triumph Business Capital Guide to Oil and Gas Financing and Factoring

Triumph Business Capital

October 8, 2019

Every industry has its challenges, but the oil and gas industry is arguably one of the most difficult for a variety of reasons.

Like any business, oil and gas companies face a mix of financial and operational roadblocks that can hurt production. More than that, oil and gas companies are constantly challenged to adapt to changing demands in the market, like different requirements for hauling frac sand, for example.

Hypergrowth and changes in demand or production can leave businesses scrambling for a way to finance their day-to-day operations, let alone taking on larger contracts that will require investments in equipment and staffing.

The ebbs and flows of oil and gas companies requires a scalable, reliable solution that matches need with speed: when business is thriving, you need money to quickly accommodate; when business slags a bit, you need money to ensure that you can meet weekly obligations like payroll.

Let’s look at a few ways that invoice factoring helps oil and gas companies overcome some of these hurdles.

Challenges for Oil and Gas Companies

Oil and gas companies face significant challenges that are unique to their industry. These include:

  • Pricing fluctuations: These can lead to intense ups and downs in terms of both workloads and income – periods of hyper growth can be just as challenging as slow times.
  • Competition: This requires careful cost control and maneuvering to avoid being elbowed out by other companies in the sector.
  • Equipment issues: Companies to pay for routine maintenance and find ways to extend the life of existing equipment as well as buying new equipment as needed and as the industry changes.
  • Regulatory compliance: Adhering to environmental standards and controls, safety standards, and more are fundamental for oil and gas companies. These are not to be taken lightly and do require significant setup and fees to ensure proper compliance.
  • Hiring and staffing: Hypergrowth can lead to an immediate need for new workers, including truck drivers. These drivers, many times, do need to have additional training or specialization, so being able to locate them and hire them quickly can always be a challenge. 
  • Traditional lender restrictions: Banks often base loans and lines of credit on a company’s expected income. As we’ve mentioned, the oil and gas industry can be up-and-down, making projections difficult at best. Worst still, some lenders place concentration limits and enforce financial covenants on business owners, potentially restraining a company’s ability to work with certain clients or use their money as they see fit.

What these all have in common is the need for a reliable cash flow solution that grows as you grow and meets your long-term vision, in addition to your day-to-day needs. Remember: loans can take days and weeks and even months to acquire. As a business owner, your responsibility is to your operations and staff. You don’t have time for long documents, site visits, etc. You need capital.

How Can Oil and Gas Factoring Help?

Triumph Business Capital is a specialist in oil and gas company factoring. We’ve got a dedicated team of specialists who understand the unique challenges of the industry.

Our invoice factoring services provide significant benefits to oil and gas companies, including:

  • Reliable, consistent cash flow based on your account receivables to ensure you have the working capital you need.
  • The flexibility to factor what you want, when you want – giving you the power to control your costs and get the cash necessary to run your business.
  • Fair evaluations of payments based on our understanding that a company’s ability to pay is more important than how quickly they pay.
  • Cash without debt – invoice factoring involves the sale of your invoice, not a loan. That means you can get the money you need without adding debt.

Arguably the biggest benefit of all is that factoring companies like Triumph Business Capital have different standards than banks. While you might struggle to qualify for a bank loan or line of credit, factoring is available as a viable alternative.

Beyond Financing

In addition to offering cash advances against your invoices, Triumph Business Capital provides an array of back office services to help your business grow. For example:

  • We provide credit checks and evaluations to help you make smart choices about extending credit to new customers.
  • We make routine collection calls to ensure your invoices are paid.
  • We provide 24/7 access to our online portal, so you can request funding, submit invoices and check the status of an account at any time.

We provide the capital. You focus on your work.

Apply for Oil and Gas Factoring

Ready to get started? Click here to read about our oil and gas factoring services and fill out an application.

Oil and gas factoring and financing are there to provide cash flow when business is slow and fuel your growth opportunities when business is booming.

If you’re wondering whether invoice factoring is right for your energy business, Triumph Business Capital is here to help. We’ve got the expertise to understand your needs and the tools to provide you with the consistent cash flow and support you need.