The Financial Solution Smart Oil and Gas Companies Use to Accelerate Growth
Seven years ago in northwestern North Dakota in an area called The Bakken, there were a few wells producing oil. Last year alone, there were 2,678 drilling permits issued in North Dakota. Obviously this produces significant opportunity; not just for drilling operations, but all the companies and industries that go into servicing these oil producers.
So what’s the problem? While there’s certainly room for a startup to make serious cash, there are also some barriers to capitalizing on growth opportunities. One of the biggest barriers facing oil and gas small business owners is running the financial side of their business – specifically generating cash flow.
With all the potential for growth, cash flow is needed to fund the next job. Yet invoice payment terms in the industry often run 60 to 90 days – sometimes even up to 120 days. With capital equipment so costly, funding the next job often means waiting to get paid for the current job, and that’s no way to grow a business.
So how do you get ahead? The answer is invoice factoring.