Financing for Oil and Natural Gas Business
Financing for Oil and Natural Gas Business
Oil and natural gas are major industries in the energy market and play an influential role in the global economy as the world’s primary fuel sources. The processes and systems involved in producing and distributing oil and gas are highly complex, capital-intensive, and require state-of-the-art technology
Historically, natural gas has been linked to oil, mainly because of the production process or upstream side of the business. For much of the history of the industry, natural gas was viewed as a nuisance and even today is flared in large quantities in some parts of the world, including the United States. Natural gas has taken on a more prominent role in the world’s energy supply as a consequence of shale gas development in the United States, as mentioned above, and its lower greenhouse gas emissions when combusted when compared to oil and coal.
The oil and Natural gas industry is a diversified and exorbitant business to implement. While these companies are responsible for finding solutions to climate change and discovering new sources of energy, all of that exploration comes at a price.
If you are a participant or involved in excavating, fracking, pipeline construction, oilfield services, or other roles in the energy sector, you’ll need capital to get your business off the ground and help it grow over time.
If you are looking for professional services in financial modeling, financial engineering or consulting and financing for oil and natural gas business, contact us anytime.
Havelet Finance Limited is ready to provide financing for Oil and Natural gas business/projects, as well as provide comprehensive support for your investments at any stage.
Benefits of Financing for Oil and Natural Gas Business
Oil and Natural gas business is associated with a lengthy financing; this can assist with a number of expenses, from ensuring that you meet regulatory approval requirements to drilling to paying for equipment you need, whether you’re in the downstream, midstream, or upstream oil sector.
Projects in the oil and gas sector can be lengthy, and payment on invoices could be months, if not years, down the road. That can negatively impact cash flow. It can also help with simple overhead expenses such as payroll and office supplies. Bottom line: financing ensures that you have the capital you need to get your business running as well as keep it chugging right along.
Financing Options for Oil and Natural Gas Business
Financing the oil and gas business is associated with a lot options. What matters is, if the choice of financing options made is ready to take up 100% funding of the entire projects with a subsidized interest rate.
Invoice Factoring or Financing: A well recognized financing options for oil and natural gas business is to gain access to cash via invoice financing or factoring. With invoice financing, you are lent funds based on the value of outstanding receivables. Once you receive payment on those invoices, you pay back the loan plus fees. With factoring, you sell your invoices, and it’s the factoring company that is responsible for getting the invoice paid.
Equipment Financing: Equipment finance describes a loan or lease that is used to obtain business equipment, which can be any tangible asset other than real estate. Equipment financing may be through obtaining a loan to purchase equipment or by leasing equipment. Should you need to purchase oil rigs or other types of equipment for your oil and gas business, an equipment loan could be useful. The equipment you’re purchasing acts as your collateral, and you may be able to get good interest rates.
Bank Loans: Another great place to get low interest rates on oil and gas financing is through banks, credit unions, and some online lenders. Be aware that most of these lenders require you to be in business for at least two years and have a good credit history.
Credit Cards: Using business credit cards can help you make purchases for business, such as office supplies or gas for company vehicles. There are many cards that offer rewards programs that let you earn points for purchases that you can then redeem for travel, cash back, and other perks. Be aware that many credit cards charge high interest rates.
Private Placement: While oil and natural gas business are often publicly traded, they can also be placed privately. This creates a very potentially interesting financing alternative for smaller companies that have strong projects that they wish to finance but who may not qualify for trading on public markets or who may want to tailor bond terms and conditions for specific investors.
Short-Term Loan If you have bad credit, you can still get financing with short-term loans. These lenders look at other factors besides credit scores, such as annual revenues or outstanding invoices. These do, however, typically have short repayment periods and high rates.
Get Financing for Your Oil and Gas Business
The best time to get financing for your oil or natural gas company is before you need it. Waiting until you’ve got a backlog of gas projects and no working capital available may make it hard for you to get a loan. Also, if your credit isn’t good, consider waiting to apply for financing and spend time building up your credit. Doing so could enable you to qualify for better pricing and pay lower interest rates.
Whether your credit scores are excellent or poor, plan ahead for your financing needs so you don’t wait until you’re desperate for the cash and have fewer options available to you.
Qualification for getting Oil and Gas Financing
Lenders don’t want to give money to a startup business that hasn’t had time to prove its stability. Most will require you to be in operation for at least two years, though some short-term lenders may accept less.
Whether you’re in the renewable energy sector or build pipelines, lenders will look at the same requirements for loans.
Another large qualification factor is your credit. Both your personal and business credit may be looked at to determine whether your company is eligible for financing or not. The better your scores, the lower the rates you may qualify for.
Your company may not have its own credit history, and if that’s the case, spend some time learning how to establish business credit.
Oil and Gas Financing application Models
Financing application models for Some loan can be completed in a few minutes while others, particularly those with banks, credit unions, or the SBA, may take longer and require more paperwork.
Most times application would be rigorous and the lender would require a comprehensive details about your business including company name, address, how long it’s been in business, and annual revenues. You may also be asked for personal details such as your contact information and Social Security number.
Lenders will also ask how much you want to borrow and what you plan to do with the funds.
Upon credit approval, you will be presented with your loan options, including repayment period and interest rate. Review the loan terms and sign the loan agreement, and funds should be deposited into your bank account within a few days.
Contact Havelet Finance Limited for all kinds of loans and project financing of large infrastructures and related oil and natural gas business.
Our Service Includes;
• Loans in euros or other currencies at the request of the client.
• The maximum amount of financing is up to 100% of the investment cost.
• Corporate refinancing of both operating and under construction enterprises.
• Long term and flexible payment schedule.