After a two-year hiatus, the oilfield services industry appears to be on the rebound.
While U.S. oil production has not yet returned to its pre-2015 levels, the number of oil rigs that have been put back to work has steadily increased in recent months. According to Baker Hughes, 741 oil and gas rigs were operating across the country in early February, up nearly 11% from the previous month and 36% higher than in February 2016.
The shale oil industry got a big boost late last year with the discovery of the largest shale deposit in the United States. Located in the oil-rich Permian Basin in Texas, the deposit is estimated to be worth $900 billion. More good news arrived last month in the form of President Donald Trump, who approved construction of the controversial Dakota Access and Keystone XL oil pipelines.
In short, the future looks bright again for the domestic oil industry.
Get Ready to Grow
Thanks to your hard work and resourcefulness, your oilfield services business survived the oil slump of 2015-16. Now, you may be seeing an increase in demand. Expect more growth in the coming months. As the rig count continues to grow nationwide, there will be more opportunities for sand and water haulers, construction companies, hot shots, roustabouts and other companies that serve the oil patch.
Ramping up to meet growing demand is a good thing, but it also comes with its share of headaches. First and foremost, you need strong cash flow to support the addition of workers, drivers, trucks and equipment. Cash may be hard to come by while waiting up to 60 days on customer payments. You also probably don’t have time to apply for and secure a bank loan or other traditional lines of credit.
Factoring Can Help
Factoring invoices may be the easiest way for your company to quickly build the working capital needed to serve your customers and support your growth.
Industry trends show that drilling companies usually take 45 to 60 days to pay their vendors. That payment cycle can deplete your company’s cash flow and limit your ability to add people, equipment and services to meet increased customer demand. The immediate cash generated from factoring can support spikes in demand and ensure you don’t have to turn down new business due to a shortage of working capital.
The funding through factoring also grows as your receivables grow. The quick cash flow provided by factoring matches your oilfield services company’s needs, whether you are in a down market or seeing a significant increase in new business.
A Trusted Partner for Oilfield Companies
When you work with RTS Financial, you gain a business partner with 20-plus years of experience providing factoring solutions for oilfield-related companies. Here’s how RTS Financial differs from other factors and financial providers that serve your industry:
- Setting up a factoring account takes less than a week.
- Once you have an account, your invoices are funded in less than a day.
- Access to funding through factoring is based on your customers’ credit, not your credit or business history.
- The funding through factoring scales up as your company’s receivables grow. There is no limit to the funding you can receive.
- RTS Financial provides free collections, credit analysis and other back-office support, allowing you to focus on growing your oilfield business.
- The RTS Carrier Services fuel card offers industry-leading discounts and weekly credit lines.
Contact Us to Learn More
If your company has not yet seen increased demand from the oilfields, it will soon. To learn more about how factoring can help you prepare for the boom, contact RTS Financial today at (844) 205-8351.
Want to learn more about factoring? Read this informative article on RTSFinancial.com.