Paragon Continues to See Receivable Financing Growth in the Oil and Gas Industry

Receivable Financing Growth in Oil and GasParagon Financial continues to see strong demand for receivable financing in the oil and gas industry.   The U.S. oil and gas services industry is experiencing an explosion in growth. This occurs as the country moves toward reduced dependence on foreign energy sources.

As the technology of locating and extracting both oil and gas energy sources expands at an exponential pace, the demand for domestic energy continues to increase along with receivable financing.

“The scale of this unfolding oil and gas revolution in the United States” is surprising in its rapidity. This according to Daniel Yergin, vice chairman of global information company IHS and head of the firm’s Cambridge Energy Research Associates unit (which he founded). Yergin is a long-time recognized expert on the energy industry.

“The fact [that] our oil production is up 40% since 2008, and the economic impact it has had on jobs, manufacturing, and competitiveness. I think that’s a theme that’s going to run through [the discussion],” Yergin said in an interview in March with CNBC in connection with an annual energy conference the firm has been sponsoring for many years.

This type of rapid growth has translated into an increasing need for receivable financing from oil and gas suppliers and vendors. Such growth is seen throughout the first three quarters of 2013.  Receivable financing allows oil and gas industry suppliers and vendors a solution to meeting their short-term financing needs.

As part of this process, a factoring company provides a vendor or supplier with immediate working capital. Such capital is up to 90% of the invoice amount.  These oil and gas vendors and suppliers include water haulers, frac sand haulers, roustabouts, vacuum trucks, environmental cleanup, excavating / dirt work, tank cleaners, pressure washing, component manufacturers, inspection services, flow backtesting, gravel pit suppliers, and rig movers.

“The United States will lead the world in gas and oil production over the next ten years, and we are already experiencing a growth pattern in the industry throughout 2013 with our accounts receivable financing program. Paragon Financial is looking forward to continuing to fund the increasing number of entrepreneurs who are suppliers to the big boys,” says Chris Curtin, President of Paragon Financial.

Hydraulic fracturing, or “fracking,” has helped lead to this revolution in gas and oil production. The U.S. Energy Information Administration (EIA) has projected that there are 2,200 trillion cubic feet of gas resources in the U.S. This is enough for 100 years. In drilling for that gas, the industry uncovered a trove of natural gas liquids.

Furthermore, the International Energy Agency has projected that the U.S. could potentially leap-frog Saudi Arabia and Russia. This will make the US the world’s biggest oil producer by 2020.

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