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.