TRANSFAC CAPITAL PICKS UP THE NICKNAME “TRANSFRAC” IN OIL AND GAS INDUSTRY

Posted in: Factoring Companies, frac, fracking, Invoice factoring, Oilfield Business Financing, Oilfield News, Staffing Factoring- Aug 19, 2013 No Comments

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Transfac Capital Picks up the nickname

“transfrac” in oil and gas industry

 

Salt Lake City, UT – (Marketwired) – August 19, 2013Transfac Capital, Inc. has acquired the nickname “Transfrac Capital” in the oil and gas industry.  The word “frac” is derived from “fracking,” which is part of the process of recovering oil and gas from an oil shale.

 

Mike Schepper, Marketing Director of Transfac Capital, stated, “The nickname originated as a spelling error in an article posted by an online oil and gas news site.  After this typo occurred, customers began referring to us as ‘Transfrac’ when calling to speak to us regarding financing.  We believe the nickname is appropriate due to the large presence Transfac has taken in the oilfield industry.  What started as a misprint has turned into a nickname we are enthusiastically embracing and is now spreading rapidly across the oil and gas industry.  We are now hearing it from customers all over the country.”

 

Transfac finances small to midsize oilfield service providers in the Utica and Marcellus shale fields, the Bakken field and the Eagle shale area. The Company has committed personnel  to these areas in the form of business development officers, and has hosted events for local companies in these areas, including sponsoring and showing support at  industry expos and conferences.

 

With locations in Salt Lake City, San Francisco, San Diego, St. Louis, Louisiana, North Dakota and Ohio, Transfac Capital is earning the distinction of being a leader in invoice financing solutions for small to medium-size businesses.

 

For more information regarding financing in the oil and gas, trucking and staffing industry, please contact Jeff Donavan at 800-458-6056 or via email at Jeffd@transfaccapital.com.

 

About Transfac Capital, Inc.

Transfac Capital, Inc. has financed business since 1942.  With over 10 locations nationwide and growing, coupled with its team’s experience owning and operating companies in the oilfield, staffing and transportation industries, Transfac Capital has become one of the leading factoring and financial business solutions companies in the industry. Transfac Capital offers competitive services in invoice factoring, account receivable management, account receivable financing, inventory financing, purchase order factoring and a fuel card program.

 

To learn more about Transfac Capital’s financing options for oilfield, transportation and staffing companies, please visit www.transfac.com  or call 800-316-4212.

 

To view career opportunities with Transfac Capital, visit www.transfaccareers.com.

 

Industry sites:

http://truckingbusinessfinancing.com/

http://staffingcompanyfinancing.com/

http://oilfieldbusinessfinancing.com/

 

For More Information Contact:

Investors:

Hanover|Elite

Kathy Addison, Chief Operating Officer

407-585-1080 or via email at TFAC@hanoverelite.com

 

Media:

Mike Schepper, Marketing Director

801-575-6500 ext. 118

 

 

 

Transfac Capital opens $2 Million Line For Staffing Firm

Posted in: Factoring Companies, Invoice factoring, Oilfield Business Financing, Oilfield News, Staffing Factoring- Aug 07, 2013 No Comments

Salt Lake City, UT – (Marketwired) – August 7, 2013 – Transfac Capital, Inc., a specialty finance company providing accounts receivable financing to small and mid-sized companies, today announced the payroll financing of a multi-location staffing firm based in Georgia.

 

Financing the staffing industry is not new to Transfac Capital. With over eight locations nationwide, Transfac has been funding staffing company invoices for years.

 

Mari Dezham, Account Executive Manager of Transfac Capital, stated, “We’ve financed several staffing agencies throughout the years and are very familiar with their payroll challenges. This particular company  has 13 locations,  each of which generate a large number of invoices. Due to the high volume of invoices, it was obvious that smaller factoring companies didn’t have the resources to handle this account quickly and efficiently. We have appointed an account executive whose sole focus is this account, which is exactly the type of service we believe our customers deserve. With our newest client, we opened a line of credit at $2 Million and the first funding was close to $1 Million, which allowed for them to continue business without interruption.

 

“When these large staffing companies, or even the smaller ones for that matter, send out their invoices, they don’t always collect payment in time to be able to make payroll. We provide a seamless, simple solution to this problem by covering those expenses and collecting the invoices for them,” said Dezham.

 

With locations in Salt Lake City, San Francisco, San Diego, St. Louis, Louisiana, North Dakota and Ohio, Transfac Capital is earning distinction as a leader in invoice financing solutions for small to medium-size businesses.

 

If your staffing agency or firm has been challenged to meet payroll, call Transfac Capital at 800-458-6056 or go to www.transfac.com. 

About Transfac Capital, Inc.

Transfac Capital, Inc. has financed business since 1942.  With over 10 locations nationwide and growing, coupled with its team’s experience owning and operating companies in the oilfield, staffing and transportation industries, Transfac Capital has become one of the leading factoring and financial business solutions companies in the industry.  Transfac Capital offers competitive services in invoice factoring, account receivable management, account receivable financing, inventory financing, purchase order factoring and a fuel card program.

 

To learn more about Transfac Capital’s financing options for oilfield, transportation and staffing companies, please visit www.transfac.com  or call 800-316-4212.

 

To view career opportunities with Transfac Capital, visit www.transfaccareers.com.

 

Industry sites:

http://truckingbusinessfinancing.com/

http://staffingcompanyfinancing.com/

http://oilfieldbusinessfinancing.com/

www.fundmyfreight.com/

Forward-Looking Statements

This press release may contain forward-looking statements, including information about management’s view of Transfac Capital Inc.’s future expectations, plans and prospects.  In particular, when used in the preceding discussion, the words “believes,” “expects,” “intends,” “plans,” “anticipates,” or “may,” and similar conditional expressions are intended to identify forward-looking statements.  Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements.  These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Transfac Capital, its subsidiaries and concepts to be materially different than those expressed or implied in such statements.  Unknown or unpredictable factors also could have material adverse effects on Transfac Capital’s future results.  The forward-looking statements included in this press release are made only as of the date hereof.  Transfac Capital cannot guarantee future results, levels of activity, performance or achievements.  Accordingly, you should not place undue reliance on these forward-looking statements.  Finally, Transfac Capital undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Transfac Capital.

 

FOR MORE INFORMATION:

HANOVER|ELITE

Kathy Addison, Chief Operating Officer

407-585-1080 or via email at TFAC@hanoverelite.com

Small Business Factoring Fast & Reliable

Posted in: Oilfield News- Jul 25, 2013 No Comments

Should you find yourself getting small business loan agreement you ought to see to it that your business will get the greatest use out of your money? You don’t just want to engage in business cash advances just because; you want it to be the correct deal at the right time so that it will help grow and sustain your business in the coming future.

Small to mid-sized business factoring from Transfac Capital will not be as troublesome and strict as a traditional bank small business loans, but if you consider it to be in line with a bank loan, you are less likely to request extra money frivolously.

If you do elect to enter an arrangement for invoice factoring company, look around and consider your options. Several companies want different terms. Transfac Capital has the best term and agreements in the factoring business.

At the moment you have the cash in your bank account, use it for its proposed purpose. It is very tempting to purchase something you don’t seriously need when you have money to spend, but remember, you will be paying for your purchase for some time, so make sure it is worth the investment.

There are many companies to obtain funding from for small to mid-sized businesses, but you will find that Transfac Capital offers the fastest and most reliable funding out of all these companies. We have been around since 1942 and helped thousands of businesses meet their obligations and even growing to become substantial businesses in their perspective industries.

We understand your business or businesses; we more than likely have your type of business in our Business Family, from Oil & Gas Transportation to Oil & Gas Drilling so we understand what problems arise and what the best way of handling them is.

 

For more information please call Transfac Capital @1.800.458.6056 to learn more.

Or apply today at Transfac.com

 

Who uses Factoring

Posted in: Factoring Companies, Invoice factoring, Oilfield Business Financing, Oilfield News- Jul 11, 2013 No Comments

Who uses Factoring?

Business owners who face exponential growth can find themselves short of the cash they need to meet every day operating expenses. Many business owners (during their first financing stage) never anticipate accelerated growth. Small businesses can access capital by tapping into a personal savings account, using credit cards or taking out a home equity loan but they may fall short of cash when uneven sales patterns occur.

Fluctuating sales can interrupt the working capital needed for supplies, rent, payroll and routine expenses. This is a common scenario that is usually not anticipated in the financial planning of the business. When business growth outpaces working capital, few options are available.

Business owners, who frantically seek financing, normally go to the most obvious source banks. They may hit a brick wall after they visit 20 banks and realize that the maximum amount of their loan can only match the collateral that their business has to offer. Most start-up businesses do not have enough assets or equity to meet the loan requirements. In addition, conventional loans are very slow in processing and may not be approved in time to meet current obligations.

Factoring is available for fast growing businesses that offer credit terms to their customers or commercial accounts. It is the easiest and most flexible type of financing available. It involves establishing a credit line by advancing money to a business by pledging its accounts receivable as collateral. The invoice created by the business (for services or products accepted by a customer) is considered (by the factoring company offering funding) to be a realized asset.

How does factoring work?

A business issues an invoice (receivable) to its customer. The factoring company purchases the receivable (from the business) at a discount. The factoring company then transfers funds to the business and mails the original invoice to the customer. Then the factoring company waits to get paid. It is that simple! The business owners do not need good credit scores for approval. Factoring companies rely mainly on the credit worthiness of the customer because the invoice for delivered product or service is the collateral used to fund, not your credit score or financial statements.

How much does factoring cost?

Factoring companies charge discount fees based on the value of the invoice. If your business accepts credit cards, then you are already factoring to a degree. For example, your credit card merchant charges you a discount fee of 3% and you receive 97%. A factoring company works almost the same way but the advance and discount fees may vary depending on volume and industry.

 

The financial reality for small oilfield service companies

Posted in: Factoring Companies, Invoice factoring, Oilfield Business Financing, Oilfield News- Jul 09, 2013 No Comments

Most oilfield service companies have serious on hand finance issues, and it’s not due to poor business management. Most of the larger oil and gas companies pay their invoices in 30-90 days, even though the contract is set for 30days net or less. We are finding out that oilfield service companies don’t have the financial reserves to wait for those payments. Some of these companies include

Acidizing & Cementing, Aggregate,  Conductor Services, Crude Haulers, Disposal Wells/Sites, Drillers, Drilling Equipment Suppliers, Environmental Clean Up, Equipment Hauling, Equipment Rentals, Equipment Rentals, Excavating, Excavators, Fishing Services, Flatbed Carriers, Flowback Testing, Fly Ash, Frac Sand Haulers, Frac Tank Cleaning, Frac Tank Cleaning, Gravel Haulers, Gravel Pit/Suppliers, Hot Shots, Logging, Mud Hauling, Open Pit Services, Open Tank Services, Pad Builders, Pad Builders, Paraffin Services, Paraffin Services, Pipe Cleaning, Pipe Hauling, Pipe Construction, Pipeline Inspection, Pit Clean Up, Plugging Contractors, Pneumatic, Pressure Washing, Refinery Maintenance, Rig Movers, Rig Transportation, Road Construction, Rousabouts, Scoria Pit/Suppliers, Site Preparation, Slickline Services, Spill Clean Up, Tank Manufacturers, Testing Services, Vacuum Trucks, Water Haulers, Water Purification, Welding, Well Servicing, Winch Trucks, Wireline Services,

along with staffing agencies that supply employees to the oilfields. Oilfield service companies have high financial demands and slow return on invoice payments, and the business owners feel it when they need the financial backing to continue everyday business growth. This typical situation puts oilfield service companies in a tough spot.

You would think that the oilfield service company would open up a standard line of credit with a bank so they can divert working capital into the business as needed. The idea is great, the process is not. Obtaining a typical line of credit is not easy for many oilfield service companies due to the banks requiring substantial collateral, clean balance sheets, and a lengthy business history. The reality is that most of these companies won’t meet those requirements. But, there is a solution. Invoice factoring.

A/R (Accounts receivable) financing, or invoice factoring has not always been popular. When invoice factoring started becoming popular stateside, many small businesses were taken advantage by start up factoring companies, and running off their customers with aggressive collection practices.

Today, invoice financing has taken a different course and now becoming one of the most used financial assets in the world.

Short of getting financed quickly, the entire process is easier then dealing with a bank..

Oilfield service factoring benefits

1. Quick cash flow: Your business instantly has access to money to expand your business, purchase material, pay employees, etc.

2. Growth: Pliable credit terms allow you to add more inventories and focus on sales, therefore growing your position in the market.

3. Stress free: The sale of invoices can be used to pay off current debt, which builds your credit rating. You can also get discounts on purchases, acquire inventory, or capitalize on growth opportunities.

The invoice factoring process is simple: The purchased invoice proceeds are sent to the business in two payments. The first payment (around  90% of the value of the invoice) is sent to you within 24 hours after submitting the invoice to the factoring company. The second payment, called the reserve, is sent to you, less the factoring company fee, when your customer pays the invoice.

Factoring companies don’t look at your credit, but they do look at the credit worthiness of your customers in which you can also view. Companies that have tax liens, recent bankruptcies, or debtor-in-possession (check out DIP financing with Transfac Capital) even qualify for invoice financing.

Invoice factoring is the best financial tool for stability and growth in small to midsize companies. Factoring lines are designed to increase as your sales grow. They also help smooth the cash flow cycle through periods of price volatility.

If you need access to cash to sustain and grow your oilfield business, invoice factoring may be the choice for you. There are so many choices in invoice factoring terms. Don’t let a financial block keep your business from growing.

Eagle Ford Shales News

Posted in: Factoring Companies, Invoice factoring, Oilfield Business Financing, Oilfield News- Jun 28, 2013 No Comments

Magnum Hunter sells Eagle Ford Shale assets to Penn Virginia

 

Deal metrics fall within the wide range set by previous deals, say analysts

Penn Virginia Corp. (NYSE: PVA) entered into a definitive agreement with Houston-based Magnum Hunter Resources Corp. (NYSE: MHR) to acquire producing properties and undeveloped leasehold interests in the Eagle Ford Shale play for approximately $400 million.

Acreage
The acquisition, in areas adjacent to PVA’s current position in the area, includes 19,000 net Eagle Ford acres in Gonzales and Lavaca counties with 3,000 boe/d of production (March average), composed of roughly 90% crude, from 49 gross (roughly 24 net) producing wells.

Following the transaction’s close, expected to take place in mid-May, Penn Virginia will have approximately 83,000 gross (54,000 net) contiguous acres in the volatile oil window of the Eagle Ford Shale. The acquisition increases PVA’s drilling inventory by 169 net locations.

“This acquisition will bring our total leasehold position to over 54,000 net acres with up to 640 drilling locations or, at a minimum, an eight-year inventory based on the expected drilling program across our expanded footprint. Increasing our rig count to six rigs should allow us to achieve significant growth in this high-margin play,” noted H. Baird Whitehead, president and CEO of Penn Virginia.

When the transaction closes, Magnum Hunter will continue to own approximately 7,000 net mineral acres located in Fayette, Lee, and Atascosa Counties in South Texas. Magnum Hunter is participating in a new horizontal Pearsall Shale well with Marathon Oil Corp. that is currently drilling in Atascosa County.

The announcement of the sale is bittersweet, said Gary C. Evans, chairman of the board and CEO of Magnum Hunter Resources, who talked to OGFJ in November about the possibility of selling what is the company’s most mature asset.

“It’s not something we have to sell. It’s not something we’re being forced to sell. It’s just that we see our upside as being defined. We’ve done about as well as we can do in this play with some of the highest producing wells throughout the entire Eagle Ford Shale. We’ve made significant improvements in the well completions, it is a “well-oiled machine”, and it might be better suited for someone with a lower cost of capital,” he said at the time.

Since entering the play with the acquisition of Sharon Resources Inc. in September 2009, Magnum Hunter has generated approximately $80 million of net cash flow from the region as of the beginning of 2013, Evans noted in a prepared statement. Based on the PVA purchase price and the net investment to-date, the cash flow implies a greater than two times return on capital invested over the past 3 years and an IRR in excess of 80%, Evans continued.

“It has always been our belief that as the various shale plays mature, building scale is extremely important for achieving long term economic value and that is what is being accomplished today,” Evans said.

Financing
PVA plans to fund the acquisition mostly with debt and has announced a senior notes offering. PVA may also opt to fund roughly $40 million through the issuance of 10 million shares to MHR. PVA has obtained a senior unsecured bridge facility from the Royal Bank of Canada and Wells Fargo to backstop any financing requirements.

The price looks decent based on pv10, noted Jefferies LLC analysts in a note to investors following the announcement. “PD locations have a pv10 of $156mm, while 51 gross PUD locations have a pv10 of $85mm. If we extrapolate the PUD pv10 to all undeveloped locations, we arrive at a total value of $700+mm. Note, however, that this estimate is not adjusted for the timing of unbooked locations, and pv10 of unbooked locations may be lower,” the analysts noted.

With three major deals in a month and a half, the Eagle Ford remains significant in the unconventional resources space. Aurora Oil & Gas Ltd. and Sanchez Energy Corp. both announced Eagle Ford deals in March.

Metrics
According to Jefferies analysts, metrics of the PVA deal “fall within the (wide) range set by prior transactions.”

The production metrics value the deal close to $133,000 per flowing boe, higher than the recent Sanchez/Hess deal valued at roughly $60,000 per flowing boe, noted Jefferies analysts, continuing that the difference may be in the quality of the acreage. “MHR’s wells with 20+ frac stages have ip’d at an average of 1,600 boe/d and recorded 30-day rates of 870 boe/d. MHR. On an acreage basis (not adjusted for existing production), the transaction implies $21,000 per acre. This looks cheaper than the Marathon (MRO, $33.57, NC) / Paloma deal from mid-2012, which transacted at $44,100 per acre for 17,000 Karnes / Live Oak acres,” they continued.

RBC Capital Markets is serving as exclusive financial advisor to Penn Virginia Corp. on the transaction

Source: http://www.ogfj.com/articles/2013/04/magnum-hunter-sells-eagle-ford-shale-assets-to-penn-virginia-.html

 

 

North Dakota sees record oil shipments by rail

Posted in: Oilfield Business Financing, Oilfield News- Jun 26, 2013 No Comments

BISMARCK, N.D. — The percentage of North Dakota oil shipped by pipelines has dramatically slipped in the past year as producers have turned to trains to reach faraway U.S. refineries where premium prices are fetched based on foreign crude prices.

But state and industry officials believe the pendulum may be swinging back in favor of pipelines as the price differential narrows between domestic and overseas crude.

“I’ve heard the price spread has dropped over the past few weeks and the barrels have been racing to the pipes again,” Ron Ness, president of the North Dakota Petroleum Council, said in an email Thursday. “Market options are good for any producer.”

Rail shipments accounted for about three-fourths of the record 794,000 barrels of crude produced daily in April, said Justin Kringstad, director of the North Dakota Pipeline Authority. Trains accounted for only 39 percent of the North Dakota’s oil shipments for the same month a year ago, data show.

“Rail has not only been able to meet the needs of producers, it has exceeded the needs by providing that extra value to North Dakota crude oil,” Kringstad said.

Pipeline shipments of sweet crude from the state’s rich Bakken and Three Forks formations slid from 21 percent of total production in March to 17 percent in April, Kringstad said, citing the most recent data available.

North Dakota has become the U.S.’s second-biggest oil producer behind Texas, but its infrastructure wasn’t capable of keeping up with the rapid growth of the oil industry. The problems that North Dakota producers have had in getting their product to market has forced them to sell for up to 30 percent less than the benchmark price for light sweet crude that’s set in Cushing, Okla., the major crude hub where most U.S. shipments are sent.

In 2008, with an oversupply problem in Cushing, North Dakota reached its then-capacity for pipeline shipments of 189,000 barrels per day, leading producers to begin shipping by train to new markets.

Billions of dollars in rail and pipeline facilities have been built over the past few years, bumping North Dakota’s current rail shipping capacity to about 800,000 barrels daily and about 583,000 barrels by pipeline.

As options and capacity increased, producers found willing and lucrative buyers in coastal refineries that had relied on foreign crude but were not served by North Dakota-linked pipelines. These refineries would pay prices comparable to more expensive Brent crude, the global benchmark used in pricing oil imported by U.S. refineries.

Kringstad said a barrel of West Texas Intermediate, the light sweet crude North Dakota produces, has been more than $20 cheaper than a premium Brent barrel over the past year, but the gap recently narrowed to less than half of that. WTI prices on Thursday were about $95 a barrel, compared to about $103 a barrel for Brent crude.

A barrel shipped by rail typically costs $2 to $3 more than if it were shipped by pipeline, Kringstad said.

“Spending an extra $2 or $3 to get an extra $8 — it’s not tough to see what the incentive is,” Kringstad said. “But since the price has narrowed, producers are reassessing their options. It’s all market driven with pricing.”

source-http://bismarcktribune.com/bakken/north-dakota-sees-record-oil-shipments-by-rail/article_cd72900a-d9da-11e2-baab-0019bb2963f4.html

Cash on hand is a business’s biggest need?

Posted in: Factoring Companies, Invoice factoring, Oilfield Business Financing- Jun 12, 2013 No Comments

Cash on hand is a business’s biggest need, and when it doesn’t come quickly enough, there is a easy and proven method to get cash fast on your receivables. Factoring is a cash flow tool that can be used by a wide variety of businesses because of the many different services it provides and the capital/cash flow it can free up.

If you ask most Americans regarding the status of our economy, you will probably get a variety of answers. Despite the recent announcement that we coming out of a recession, economists are telling the American public that there is light at the end of the tunnel and the Federal Reserve is trying desperately to keep the economy from stalling. However, start asking the question to most businesses and they might tell you that business is down.

When the economy shows signs of a sluggish trend, one of the first things to slow down is a business’s cash flow. Businesses that are not prepared to creatively raise additional working capital may be in for a rough ride when their receivables begin to trickle in.

As we all know, most banks have been stockpiling their loan loss reserves over the last several years, and with good reason. It would appear that they are going to be dipping into those reserves to help get them out of loans that they really had no business writing in the first place.

Credit at most commercial banks is being tightened almost to point of extinction, which leaves many struggling businesses with few available alternatives for improving their financial standing..

Accounts Receivable (AR) funding, a financial tool now commonly referred to as Factoring, it has been in use for centuries.

Factoring is a cash flow tool that can be used by many businesses, not just small struggling operations, but even your medium sized businesses. Many businesses factor simply because of the support and services it provides and your companies resources it can free up.

What basic qualifications does a business need to have in order to be a candidate for factoring?

They must be selling to other creditworthy businesses. The product or service must have been delivered and accepted. The factor must be able to obtain a priority collateral position on the receivables. The customer may not have any rights to return or offset payment on the product or service.

Factoring has evolved greatly over the past decade and can be very competitive with conventional financing. Factoring companies even participate with other lenders in workout situations or to provide the needed financing to assist a business over a hurdle.

It should be made clear that factors are not in competition with conventional lenders. There are certainly some businesses that factoring is not an ideal solution while other industries are dependent on factors for their day to day business needs.

For businesses that can’t afford to play banker to the likes of IBM, Microsoft or other companies who may also be struggling with their cash position, factoring is a sensible solution.

The next time you have a client who is having difficulty meeting their obligations, perhaps factoring should be given some consideration.

Apply Today for your cash on hand needs.

Choosing a Factoring Company

Posted in: Invoice factoring, Oilfield Business Financing- Jun 12, 2013 No Comments

Transfac Capital Since 1942

Factoring companies are financing companies that buy your credit invoices from you. These companies then proceed to wire the invoice amount to your bank account within 24 to 48 hours. The Factoring companies retain a ‘factoring fee’ from the invoice amount as their service fees. This fee could range depending on the arrangement that you have with your Factoring company. This money can be extremely useful for you to pay your fuel and servicing bills, your employees’ salaries and can even fund your expansion plans. Your Factoring company could also arrange to collect the payment from your clients on the due date. However, it is essential to locate the right Factoring company for your trucking business, since your reputation too could suffer due to the misdeeds of the factoring company.

You can compile a list of probable Factoring companies by looking up the Internet or checking various advertisements placed in related to trade magazines. If any of your friends can refer a factoring company, then it could be better. Always double check the factoring company, before tying up with them. You should always choose a company with experience in working with your industry and companies with similar needs as yours. This will eliminate any trial-and-error processes during the setting-up phase. Since, your clients will also need to be informed of your partnership with the factoring company; you will need to ensure that they are comfortable with the new arrangement. The Factoring company’s staff should be polite and tactful, while handling your clients. They should not be harassing your customers while there are collecting on invoices.

The ideal Factoring company should also have enough funds to wire the amount into your account within the decided time limit. They should not delay any payments or provide lame excuses for the delay on a regular basis. They should also not insist on a long-term contract, since this might prevent you from parting ways, in case you are not comfortable with the arrangement. The factoring fees should be reasonable, but this rate should not be the only criteria, while making your choice.

The factoring company should also have the latest data on hand, so that there is no confusion regarding collection of payments. The factoring company should be easily accessible over the phone, fax and email and should communicate promptly in case of any problem. There should be one or two answerable people in your factoring company that are personally involved in handling your account. The company should also have the ability and investors and own resources to grow along with your company. The factoring company should also not withhold any additional sum from your invoice, until your client pays up. They should pay you the entire invoice amount minus the factoring fee immediately. Inquire with some of their regular clients to get an accurate feedback about the factoring company’s quality of service.

You should thus conduct a proper research into the credentials of all the prospective Factoring companies, before deciding on the ideal Factoring company that suits your business. The right Factoring company can hence put an end to your cash flow problems and enable you to haul away smoothly. To find out more about Transfac Capital factoring please visit our website Transfac.com.

Majority of oilfield service companies have operating cash flow problems

Posted in: Oilfield Business Financing- May 20, 2013 No Comments

Majority of oilfield service companies have operating cash flow problems, and it’s not their fault. The majority of the big oil and gas companies pay their invoices in 30-90 days. Many oilfield service companies don’t have the capital to wait for those payments; they have their own bills to meet. Oilfield service companies have high cash demands and slow turnaround times, and business owners feel it where it hurts-their pocket books. This puts oilfield service companies between a rock and a hard place.
At first glance, it would seem that the company should use credit so they can put working capital into the company as needed. The principle is a great idea. Using a traditional line of credit is very difficult for many oilfield service companies because most banks require substantial collateral, clean balance sheets, and long successful credit report. Few oilfield service companies meet those criteria’s. But, there is a solution, Oilfield Factoring.
Oilfield factoring allows business, such as oilfield service companies, to capture capital that would have been locked up in slow payment of invoices. Factoring reduces the time it takes your business to get paid, so you can stay current on payroll and obligations.
There are three main benefits of oilfield factoring for oilfield service companies:
1. Cash flow: The business’ capital flow improves immediately as invoices are created and sold.
2. Increased Business: Easy credit terms give the business a competitive edge in its industry. Reliable cash flow allows more sales to large but slower paying customers.
3. Reduce debt and expand business: The proceeds from the sale of invoices can be used to pay off debt, get cash discounts on purchases, acquire inventory, or capitalize on growth.
The way invoice factoring works is quite simple: the factored invoice proceeds are sent to the business in two installments. The first installment (usually 90% of the face value of the invoice) is sent to you within 24 hours after submitting the invoice to the factoring company. The second installment, also called the reserve, is remitted to you, less the factoring fee, when your customer pays the invoice.
Factoring companies don’t look at your business’ credit, but they look at the credit worthiness of your customers. Businesses that have tax liens, recent bankruptcies, or DPI (debtor-in-possession) even qualify oilfield factoring.
Oilfield factoring is the perfect tool for stability and growth in oilfield service companies. Factoring lines are designed to increase as your sales grow and self-liquidate as they cool off, which helps smooth the capital flow cycle through periods of price volatility.
If you need access to capital to sustain and grow your business, oilfield factoring may be the choice for you.