OILFIELD
Everyone says they know your business, but VeoGlobal specializes in Factoring and Financing For Oilfield’s unique cash flow needs.
VeoGlobal REALLY Understands Your Cash Flow Problems!
With over 20 years of industry experience, VeoGlobal provides oilfield service operations with much-needed working capital throughout the United States and Canada.
The oilfield service companies utilize their invoices to receive immediate cash to fund their repairs, payroll, equipment purchases and the occasional expensive night out with the company man. Often, they also have other financing needs as well that VeoGlobal can blend into a total financial package.
Oilfield operators and large oilfield servicing companies like to hold on to their cash for as long as possible—this allows them to reinvest. For the vendor, that means waiting up to 120 days to receive the cash that they are due. Invoice factoring allows an oilfield servicing vendor to receive a large portion of the invoice value within 24 hours, and this is what VeoGlobal specializes in.
Oilfield Invoice Factoring: What is it?
Factoring your invoices allows you instant access to capital
In a typical oilfield operator-vendor relationship, an oilfield servicing vendor will perform oilfield servicing work for the operator such as rig washing, roustabout, flowback, etc. After the job is done, the oilfield servicing vendor will submit an invoice to the oilfield operator, and this is where the pain begins. Typically, an operator will take a minimum of 45 days to pay the oilfield servicing vendor, even up to 120 days. This causes a major cashflow crunch for the vendor. He can either wait the full 45 days and experience slow to no growth, or he can factor his invoices to receive up to 90% of the invoice value within 24 hours.
The appeal of oilfield invoice factoring lies in its simplicity, here is the process:
Oilfield Invoice Factoring Process
- Finish work, bill your client as usual
- Send completed and signed invoice to the invoice factoring company
- Receive an ACH advance from the invoice factoring company
- Instead of paying you, your customer will pay the invoice factoring company
- Receive the remaining, cash minus a fee, once customer pays factoring company
Why Oilfield Invoice Factoring Works
A huge number of oilfield servicing company owners’ factor for a myriad of reasons, but the main reason is simple: it works. By utilizing invoice factoring, a service company owner has instant access to capital he normally would have had to wait at least 45 days to receive. This allows him to handle his day-to-day expenses with ease. Another key reason why factoring works so well is that it is NOT a loan. Loans can be a dangerous way to finance one’s business and especially in an oilfield. With the constant booms and busts, who knows if a company will be in business in two or three years? By factoring his or her oilfield invoices, this allows the owner to have strong cash flow WITHOUT going into debt. The factoring company receives its money from the owner’s customers, not the owner. In addition to simple cash advances, a factoring company
will provide supplementary services such as potential customer credit checks, accounts receivables bookkeeping, accounts receivables management, expert collection services, professional and courteous collection calls, and much, much more.
Cashflow
Cashflow is to a business what water is to the human body. A man can run all day and win a race, but without water, he will collapse the next day and never run again. Likewise, without proper cash flow, a business can be highly successful for a month, but under the surface, the business owner has no capital past one-month billing cycle. Little do his employees know, he won’t make cash flow that week, he is done growing as a business, and he certainly won’t be able to purchase that F-150 his sales guy desperately needed. Factoring his invoices will allow him to handle all these things and boost his cash flow. The body needs water, a business needs available cash.
Payroll
The loyalty of any given employee largely rests on one factoring in business: getting paid. Unlike ownership, employees rely on bi-weekly payments so that they can support their families, pay their rent, put food on their tables, etc. Without employees, a business is just a one-man-shop on a dusty, dead-end road. Supporting payroll is vital for a business owner, and factoring allows for immediately available cash to put in the employee’s pockets.
Growth
A mom-and-pop-shop is widely romanticized in the business world, but the reality is that without growth, a business will be shut down to a competitor’s growth. When a competing business has easy access to capital, that will allow them to outbid you on any given project. They’re already meeting their margins, and so can afford lower priced bids.
Factoring allows for said easy access to capital. Instead of sitting on $200k worth of invoices for the next 45 days, factor them and bid on larger, more lucrative jobs. Also, with VeoGlobal, we know that you may have other financial requirements as well and we can structure an entire financial package for your unique needs.
General Expenses
Unfortunately, operating a business is not free. A successful business comes with the hefty price tag of monthly warehouse rent, electricity, gas, taxes, equipment, etc. Staying on top of general payables is vital for the success of a business and with rapid growth this poses a problem. Growing quickly means that one’s cash is largely tied up in new bids, operational equipment, field workers. The general expenses can easily be forgotten but they represent the core of one’s business. Oilfield invoice factoring and the specialized financing packages that VeoGlobal can structure uniquely for your business, allows one to have sufficient cash for BOTH rapid growth AND maintaining one’s general expenses.
So what are you waiting on?
Contact us today, and not only will someone call you back within an hour, but you will also be able to personally talk to the President of our company who will review your needs, and ensure that your Oil Field Factoring and Financing Needs will be serviced properly, for the best rate possible, and as fast as humanly possible.