A Guide for Selecting Oilfield Factoring Companies.
Coming up with a smart business idea is not a problem but rather the lack of funds to bring it to life. The good news is that anyone who wants funding for a business can now approach the factor funding companies. The oil field requires heavy investment which is why you ought to work with a factor funding company. It is crucial for you to consider the kind of a company you are getting in bed with so that you do not end up disappointed. It is the company that will be controlling your invoices which means you should not make random picks because you may be digging into your savings more often when the payments are delayed. You can check out the online reviews . Even if a company has some negative reviews, do not write it off immediately especially if the positive reviews outweigh the negatives. Additionally, you should inquire or investigate more on how the company dealt with that kind of feedback. You are choosing the company to be your partner and this means there are responsibilities. Back-office support services are important and they include items like credit and risk analysis, management for treasury and accounts receivables are well as collections.
It is important for the factoring company to have experience in their lane as well as the industry you are invested in. You need a company that has worked with other oilfield investors before because this means the invoicing requirements will not be a new thing to them not to mention the factor that they will be well acquainted with the key players in the field.
When it comes to the services offered by the factoring companies, there is the non-recourse and recourse factoring. You will find recourse factoring more commonly in which it is the client who bears the ultimate liability for any invoice. What this means is that in case of disputed or unpaid invoices, they will be recoursed or sold back to the factoring client. When you are going for this option, there will not be high risks to bear but this comes with high advance rates. When the factoring fee for non-recourse and recourse factoring programs are compared, the former has higher fees. You ought to consider the length of time you will have to wait until the account is setup. You will be in a hurry to get the money you want which is why you should not be working with a company that does not see the need to speed up the process. In most cases, this process is completed in a few days but do not make assumptions.