There are a lot of businesses which exist only in the minds of people because they lack the funding to start them. However, there are factor funding companies which have stepped up to make sure this does not happen. Remember that the oilfield only benefits those who have a lot of money which is why you need a company to fund your investment if this is the route you want to take. Even so, you ought to be careful when choosing the company so that you do not end up burning your fingers. It is the company that will be controlling your invoices which means you should not make random picks because you may be digging into your savings more often when the payments are delayed. the factoring companies now have online reviews which you should peruse through before determining your pick. Even if a company has some negative reviews, do not write it off immediately especially if the positive reviews outweigh the negatives. Also, you have to take a note of how the company handled the negative review. Factoring companies ought to be partners in business who take their responsibilities seriously. There should be back-office support services like collections, treasury management, accounts receivable management, risk and credit analysis.
It is important for the factoring company to have experience in their lane as well as the industry you are invested in. You need a company that has worked with other oilfield investors before because this means the invoicing requirements will not be a new thing to them not to mention the factor that they will be well acquainted with the key players in the field.
There is the recourse and non-recourse factoring which you should be well informed about. You will find recourse factoring more commonly in which it is the client who bears the ultimate liability for any invoice. What this means is that in case of disputed or unpaid invoices, they will be recoursed or sold back to the factoring client. When you are going for this option, there will not be high risks to bear but this comes with high advance rates. Also, the factoring fee is much lower as opposed to non-recourse. You ought to consider the length of time you will have to wait until the account is setup. Since your business operations will be in line, ensure you have selected a company that is not going to delay processing of the account. Even though in many companies the process can be wrapped up in just a few days, assumptions will not get you anywhere which is why you need the facts at hand before acting.