Due to recent increased activity in oil and gas exploration, oil drill bit manufacturers and related service providers may find themselves with cash flow shortages.
El Paso, TX (PRWEB) February 1, 2006 -- 1st Commercial Credit provides a Texas oil drill bit manufacturer with a $1 million receivable factoring line of credit. This company can now be fluid in capital as it prepares to double sales in the next 90 days. Due to the credit worthiness of its account debtor (the customer buying the manufacturer’s drill bits), $1 million in receivable financing was authorized. Prior to this, the company (self-financed since it’s inception in mid-2004) had steadily outpaced its equity and could no longer sustain positive cash flow for future growth.
According to a January 27, 2006 report in the Oil and Gas Journal, US drilling continued to climb to a total of 1,487 rotary rigs (up from 1,256 this time last year). The State of Texas alone had a total of 667 rotary gigs (up from 540 from a year ago).
Many service providers and suppliers in the oil and gas industry are experiencing their own cash flow shortages due to this increase in sales, combined with 45 to 60 days required for collections. These suppliers may show uneven sales patterns on their income statements - a trend that will usually eliminate banks as a source of financing.
1st Commercial Credit can help these suppliers by providing receivable factoring services during uneven sales patterns and long-term collection periods. The receivable credit line authorized is based on the credit quality of the account debtor (customer that is billed) and not the client (seller or supplier).
According to Raul Esqueda (President of 1st Commercial Credit): “If your accounts receivable can generate the most working capital, consider factoring, instead of borrowing against your receivable balances. Factoring is fast, flexible and more affordable than you might expect, and as your accounts receivable balances increase, so does the amount of cash available to your company. Decisions are made the same day and funding usually takes 3 to 5 working days.”
1st Commercial Credit also provides receivable factoring services to oil and gas exploration service providers such as seismic survey or geophysical operators. Oil & gas field equipment suppliers (including manufacturers of drilling fluids, drill rigs, lifts, geophysical prospecting equipment, pipes, pumps, production tools, valves, and wellheads) are also eligible for these factoring services.
1st Commercial Credit offers export trade finance to clients in every major world market and can convert receivable finance transactions in 17 currencies.
US and Canada Tel 1 800 450 9653
United Kingdom Tel 0 800 404 9669
www.1stcommercialcredit.com
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