Obtaining conventional bank financing for service companies to the energy, oil, and gas industry can be a long and tedious process. Getting business financing is tough when the economy is doing well and almost impossible when the economy is doing poorly. Only 20% of small businesses are approved for a bank loan or line of credit. There is a reason for this. Lending money to a small business is risky, especially for industries that are in flux like the energy sector.
Most financial institutions will ask for audited financial statements and will insist that your business must have good collateral. What qualifies as a good guarantee? Usually, real estate, machinery, and accounts receivable in some combination. Furthermore, banks and other funding companies also want to see a multiyear track record in which your company shows substantial growth.
But what if you own a startup? Or do not have hard collateral? Or, what if your business is in a turnaround situation? Usually, you’ll be out of luck.
What Are the Benefits of PO Factoring for the Energy Industry?
- Fast funding
- Increase working capital and growth
- We fund water haulers, roughnecks, welders, riggers, roustabouts, crane operators, fracking operations, and other oil industry vendors.
- No dollar limits
- Obtain pre-credit approval on your clients
- Non-recourse funding – Insure away client bankruptcy risk
- Won’t restrict other assets