Oil & Gas Factoring FAQ
Every question oilfield contractors ask — answered plainly. No jargon, no banker talk.
Every question oilfield contractors ask — answered plainly. No jargon, no banker talk.
Factoring is when you sell your unpaid invoices and get cash the same day — instead of waiting 60–90 days for your operator. You receive 80–90% of the invoice value up front. It is not a loan. Nothing goes on your balance sheet. When the operator pays, you get the remaining reserve balance minus a small fee.
No. Invoice factoring is the sale of an account receivable — an asset you already own. You are not borrowing money. No monthly payments, no interest charges, no debt on your balance sheet, and no impact on your ability to borrow from a bank in the future.
Net-30, Net-60, and Net-90 means the operator has 30, 60, or 90 calendar days from your invoice date to issue payment. In oil and gas, Net-60 and Net-90 are the norm. You finish a job in January and may not see that money until March or April. Invoice factoring eliminates this gap.
No. Approval is based on the creditworthiness of your customers — the operators and prime contractors you invoice. Brand new companies and those with past difficulties can all qualify as long as their customers are credible energy companies.
Most B2B oilfield service companies qualify: drilling, hot shot trucking, water hauling, wireline, flowback, oilfield staffing, equipment rental, pipeline services, inspection companies, chemical suppliers, environmental services, and more. Key requirements: B2B invoicing for completed work, $50K+ per month.
$50,000 per month with growth indicators. No maximum — capacity goes up to $40 million per month per client.
Construction progress billing, consumer-facing businesses, medical receivables to third-party insurance, cannabis businesses, and invoices for work not yet completed.
Oilfield factoring fees typically run 1%–5% of invoice face value per 30-day period. Companies invoicing Chevron, Shell, or ExxonMobil typically qualify for lower rates. Example: $100,000 invoice, you get $90,000 today. When the operator pays in 60 days, you receive roughly $7,500 back after a $2,500 fee.
80%–90% of the invoice face value. The remaining 10%–20% is held in reserve and returned minus the factoring fee when your customer pays.
Most oilfield contractors receive funds within 24 hours of submitting a verified invoice. After your facility is set up (1–3 business days initially), subsequent submissions are funded the same or next business day.
In most cases, yes. Your customers are notified to send payment to the factoring company instead of to you. This is called notification factoring and is completely standard in the oilfield industry.
Recourse: if your customer does not pay due to insolvency, you must buy the invoice back. Lower fees, more common. Non-recourse: if your customer goes bankrupt, the factoring company absorbs the loss. Higher fees, more protection.
Free application. Same-day approval. Cash in your account within 24 hours.