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Oil and Gas

The Benefits of Receivable Financing & Non-Recourse Invoice Factoring For Oil, Gas, and Oilfield Energy Companies

Oil Gas and Oilfield Factoring

The Benefits of Oil Gas Industry Factoring

The US oil and gas industry had been experiencing a surge in production because of new technologies that enables the industry to gross higher profit margins. At the same time, the increased output and harsh competition fighting for the lowest price has resulted in a downward trend in oil and gas prices. The result has been a cash crunch for many oil and gas companies borrowing a large amount of cash to stay afloat.

Since 1994 Paragon Financial Group has been providing oil gas service and employment factoring as an alternative to conventional Bank Financing, when the banks wouldn’t provide energy suppliers financing, Paragon could provide oil, energy, and gas companies a steady cash flow through the factoring of their account receivables or invoice factoring. When you need cash now to be able to fulfill a large order Paragon is there for you.

What is a Factoring for the Energy Industry?

Factoring sometimes referred to as Invoice discounting. Small businesses commonly use factoring as a financing tool. When your Oil and Gas company sells its goods or services, it generally provides payment terms to its customers, rather than require cash at the time of sale. There are many essential reasons for this business practice, including increasing sales and developing long-term relationships. When such a transaction takes place, the business is left with an account receivable which it holds on its books until the customer pays it turns into cash.

What is the Oil and Gas Factoring Process?

The factoring process is very straightforward. An oilfield services company or oilfield supplier sells its accounts receivable to a finance company (a “Factor”) in return for an immediate cash advance-usually 80-90% of the invoice amount. Invoice discounting is conducted under what is called “full notification,” meaning the account debtor is made aware that the invoice has been sold, and is directed to make payment directly to the finance company. The Factor then follows for payment of the receivable, deducts its fees from the proceeds, and remits the remaining balance to the business. Invoice discounting is the selling of accounts receivable to a third party to improve cash flow.
The Factoring Process

How can Factoring help my Oil and Gas Company?

When you cannot wait 30-90 or more days for payment of an oilfield invoice Paragon is there. Paragon pays you up to 90% of your invoice amount immediately upon invoicing, through our factoring program. Also, you will have the money to meet your oil staffing payroll, grow your company, and pay suppliers. We even become your credit department.

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What are the Benefits of Oilfield Factoring with Paragon?

  • We finance water haulers, roughnecks, welders, riggers, roustabouts, crane operators, fracking operations, and other oil industry vendors.
  • Get Quick Approval and Fast Funding in 24-48 hours
  • Get up to 90% of your invoice advanced
  • Resolve Payroll & Tax Issues
  • Increase Working Capital and Growth
  • Client Credit Services & Risk Management
  • Accounts Receivable Management
  • Receivable Financing

Which Energy Industry Suppliers can Qualify for Factoring?

  • Oilfield Service Vendors and Suppliers
  • Water Haulers
  • Frac Sand Haulers
  • Roustabouts
  • Vacuum Trucks
  • Environmental Cleanup
  • Excavating / Dirt Work
  • Tank/Pipe Cleaners
  • Pressure Washing
  • Component Manufacturers
  • Inspection Services
  • Flow Back Testing
  • Gravel Pit Suppliers
  • Rig Movers and more.

COO of Paragon Financial, Jon Anselma, on the state of oil and gas financing, “Larger oil and gas companies hire smaller companies to help them grow and complete every phase of their process. It’s these smaller to medium-size businesses that will need proper invoice factoring in place to supplement their growth and ease the associated cash flow difficulties.”

Get fast funding for your oil, gas, and oilfield energy companies today!

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