Capital Solutions Oilfield Services vs. Traditional Factoring
| Important Issue / Variable | Factoring 1 | Capital Solutions' Oilfield Services |
|---|---|---|
| Type of contract | Annual / biannual | Open (you can leave anytime) |
| Fees | Multi-layered, difficult to predict and verify. Many factors still charge a very expensive fixed/flat rate | Single-layered, directly proportional to time; very straight forward and easy to verify |
| Early termination penalties | Yes | No |
| Collections | Factor does them (usually heavy-handed) | You continue doing them the same way you do them today |
| Invoices to your customers | Factor sends | You send |
| Statements to your customers | Factor sends | Never sends |
| Which customers to have funded | Factor usually requires all | You decide which customers to fund based on your needs |
| Which invoices to have funded | Factor usually requires all invoices | You decide which invoice to fund based on your needs |
| Your customer's credit limit | Factor establishes credit limit for each one of them | Rarely an issue |
| Minimum monthly fees | Yes | Never |
| Line size | Limits set annually | Only limited by amount of invoices you run through us |
| Invoice notation fee | Yes 2 | Never |
| Startup turnaround time | Usually 15 to 20 days | Usually 5 days, rarely over 10 days |
| Sign-up fees | Usually $1,500 non-refundable | $350 totally refundable when you leave the relationship |
| Your contact person | Clerical person | Meet first with our CEO, then the operations manager. Always someone with a brain. |
| Personal guaranty | Always | No |
| Can you call lender's references? | Rarely | Always |
| Does the lender provide reports? | Yes, but frequently varies and it's spotty | Yes, unlimited. You have both full details and broad information of your account either by fax or online 24/7 |
| Diversification | Maximum concentration is usually 25 to 30 percent | Rarely an issue |
| Audits | Yes, and you pay for them | Never |
| Wire transfers | Usually $35 each | $15 each |
| Submit tax returns | Quarterly | Never |
| Submit corporate financials | Monthly | Never |
| Satisfaction guarantee | Never | YES! |
1 Of course, there are various ways in which factors structure their deals. This chart provides what is most common in the factoring trade.
2 Factors often charge a penalty if you don't make the invoice out correctly.
You save money by working with the principal instead of a broker. Contact us today to speak with our business financing executives, find out how easy it is to qualify and ask how we can help your oilfield services business grow.
Hear what our oilfield clients sayWhat Our Clients Are Saying
- Keri Gray,The HUGE difference I found since we are working with you... is in the day-to-day life... Since Capital Solutions is funding us there is no "fear"... when I talk to a vendor or need to make payroll. You guys have also bent over backwards... to make it work for us. I really appreciate that.
Energy Services
- Brenda and Mark Neufeld,In our very first conversation I noticed that you not only understood our situation, but also the Oil & Gas trade. Capital Solutions has been an invaluable help... We have grown our business exponentially thanks to you. I can now probably qualify for a traditional line of credit (...but I'm not sure I want to).
B.N.M. Piloting Services
- George Del Toro,We were funded [in 10 days] (the approval process was very smooth). The way I spend my time has changed dramatically since then. I can spend as much time as I need visiting with customers and out on the field... In closing I would like to tell you that Capital Solutions has made it possible for GDT Well Service, Inc. to triple (300%) its business in the last year, without any of the "growing pains".
GDT Well Service