The Oilfield Factoring Story
A thick smoke came out and Bryan Figueredo felt a sense of deep disappointment. The engine of his truck failed to work. Bryan slapped the truck’s hood in frustration because he had a crew full of new welders out on a line and they needed some extra supervising. He had foreseen this happening, the engine of his truck dying but he thought it was okay to keep repairing it and was expecting it to last a bit longer. There was just not enough budget from his company the Burton Oilfield Services to buy a new vehicle. He already had spent the money for new pneumatic trailers so they could do the frac sand hauling services for his clients. It was a beauty but expensive. See Truck Factoring Reviews.
Burton had kept the company small and just handled welding since the start, though a company was like a child and needed to grow. The frac sand business began to boom in their area so he made a decision to invest all the company’s money into this because its really not easy to feed a family using only the white paper where invoices are printed on. Now he doesn’t know what to do because if he buy a new truck he wouldn’t be able to pay his new workers at the end of the month.His employees will surely be unable to pay their bills using the invoice and they could surely not wait for 90 days for the customers to make payments.
His pal named Dan had suggested for him to contact a factoring company so he could have new cash flow to buy new trailers for the company at a meeting. Dan was telling him about it because he had bought a pneumatic trailer too with the factoring money. Competition is present between the two of them and it cannot be avoided but Bryanknew that Dan is way more advanced compared to him and his company.This factoring idea might work for his company too and he thought with a smile, it might give him something to brag about to Dan at the next Elks Lodge meeting.
Bryan hitched a ride from one of his crews to return to his office. He heard a good report back about the new guys and then began researching factoring companies online. There were plenty of factoring companies he can choose from. Several of these companies were so huge and even handled factoring for industries outside of the trucking business. Others were small time companies which offered factoring for businesses in the oilfield industry. He went for half and half. He called a few of the big companies and he called a few of the smaller ones. What he learned about factoring amazed him.
He almost couldn’t believe its true. There was no interest, therefore he wouldn’t have to spend even 1 cent above the amount of the invoice just to get the money he needed. It was way better than getting a loan from the bank where you would have to pay for the amount you borrowed plus the interest. Credit was also not an issue and he was not even asked about it plus there was no background check on his or the company’s credit report. The company was only concerned whether the clients on the accounts receivables were reliable enough to make the payments and he knew that they were as he had checked it himself.
There was little Bryan loved more than being out the on the line with his crews.He hated being trapped in the office doing paperwork and he preferred the laughs with the guys much more the meetings with his administration.So it was a big bonus for him to have a large section of his office work taken over by the factoring company who offered credit analysis of potential customers, accounts receivable management, and much of his overall billing. Not only that but he also had the choice to decide which accounts would go to the factoring company therefore he can choose to keep accounts which are in super close relationship with the company. Bryanhad a sense of confidence since he knew that the factoring company has already started a great working relationship with most of his most important clients, therefore it was an easy move to put all of them in the accounts receivables to be handled by the factoring company.
Once he had chosen a factoring company, all he had to do was to fill out an application that required having his secretary fax documentation and an accounts receivable report.The next thing he knew the factoring company was sending back a contract to sign and the price for his invoices paid promptly to Burton Oilfield Services. The cash that was sent to him was almost 85% of the invoice value. Some money had been saved as a reserve by the factoring company and would be reimbursed once the invoice was paid in full by the customers, but Bryanhad no worries. He trusted the customers that he had brought on board and knew he would be able to get that reserve back later. The main part of the cash is already in his hands and is now a ready source of funds for doing things so his company can continue to thrive.
Bryan and his company are now able to expand to more work. All he had to do was to keep the invoices coming and the money would be there ready and waiting so he could bid for twice as many jobs as he had before he turned to factoring. Now he did not have to worry about where the money for equipment, men, or even the fuel for transport would come from for the new projects. Furthermore, he can hire additional journeymen pipe layers as well as professional welders for those big automated welding projects or perhaps decide to be a leader in hand welding. He can imagine feeling so proud while telling Dan at the next Elks Lodge meeting that he has purchased new cold bending equipment. One of the things Bryan really wished to do was to be able to give a raise to his workers. They hadn’t receive any raise for a span of a year and a half. For him, his crew deserved more paycheck as compared to the union men. Factoring gave him a lot of possibilities which he never imagined would be possible for him. A free source of cash would certainly enable him to achieve his dream of expanding and developing his business so that it can become a huge company which he always believed it could be. Also see Truck Factoring Reviews.