Equipment Finance and Leasing:
Equipment used in the E & P, Well Servicing/Completion and Pipeline Construction/Maintenance
is often prohibitively expensive. If you buy it with cash, you have to part with a whole lot of it, which means that you end
up with less working capital.
Given growing equipment demand,
many business owners in the Upstream and Midstream Oil & Gas Industry find that equipment financing and leasing is a key
Have you considered a Sale-Leaseback
of the equipment you already own?
If you already own
a piece of equipment used in your operation that is unencumbered you could consider selling it and leasing it back.
Businesses ranging from small sole proprietors to Fortune 100 Companies
finance/lease their equipment because of access to a wide range of benefits.
Get 100% Financing With No Down Payment
Working Capital/Cash Flow
Hedge Against Inflation
Plan Expenses For Cash Flow And Business Cycle Fluctuations
Keep Equipment Up To Date with Newest/Latest /Technology
Address Tax Considerations
Get No-Hassle Equipment Disposal
Accounts Receivable Management
Most subcontractors in the oil and gas industry have enjoyed a number of good years.
What will the future bring?
large oil and gas clients have grown more conservative in their expenditures and have started to take longer to pay their
Companies that paid in 30 days
are now paying in net 45. Those that used to pay in net 45 days are now paying in net 60 days. This has created a challenge
for many service providers, who don't always have the resources to wait a long time to get paid.
There is a solution that has been gaining interest in recent years that is designed specifically
to fix the cash flow problems created by slow paying invoices. It enables businesses to get quick payment for their
invoices, providing the needed funds to meet current expenses and fund new growth investments.
This financial strategy that has long been used by multi-national firms and others
Factoring works as a financial intermediary
that buys your invoices at a small discount (similar to a credit card discount) and pays you upfront for them.
This gives your company the funds it needs to operate and invest while the
factoring company holds the invoice until the customer pays. Once the customer pays, on their usual schedule, the transaction
is settled (for a small fee - similar to a credit card fee).
key feature of factoring is that your customer does not have to pay sooner...they pay on their usual terms.
Qualifying for Factoring is relatively easy.
The bigest requirement is that your company needs to work with credit worthy customers. Most
of the operators in the oil and gas industry have stellar credit, so this should not be a problem.
Additionally this financing facility includes as part of the process, Trade Credit Insurance
at no additional cost.
Please also see Trade Credit Insurance explained in our Insurance Tools section.
R A Moore Consultants Brochure PDF