Everyone knows it takes money to make money. Liquid Capital provides that money by way of immediately funding a business upon confirmation of a sale of goods or services to its customers, rather than the business having to wait 30 to 90 days, or more, to collect payment. Liquid Capital waits the 30 to 90 days to receive repayment directly from those customers. The fees Liquid Capital charges are based upon the length of time it takes to collect from those same customers. Very often when the economy slows or dramatically grows, businesses have a difficult time funding their activities. This is where Liquid Capital steps in to support businesses coming out of a slow time or helping them keep up with aggressive growth.
What these cycles produce for Liquid Capital are surges in capital requirements from existing clients and an influx of new clients. Banks are not absolved from reacting to business cycles but often are perceived to be behind the curve in responding to both reductions and increases in credit granting. For those reasons, the ability of Liquid Capital to react within days of new client requests is the major reason why clients value our services. A great misnomer is that companies choosing to factor their accounts are living on borrowed time, when in fact a great deal of Liquid Capital’s book of clients are “bankable”. However, because many clients know the next downturn and upturn is just around the corner, they stay with Liquid Capital. Managers strive to stabilize or control contraction and expansion as much as possible and having a stable and responsive financing partner is paramount to that goal and success.
In many previous extensive slowdowns in the energy sector, the rate of recovery has been inversely proportional to the length of the slowdown. Meaning the next rebound could come on with abnormally aggressive growth. At this very time many exploration companies are planning for the eventual rebound in the oil & gas energy sector. Today’s oil & gas service companies will be required to respond on a just-in-time basis. When the demand does increase dramatically, the first dilemma many managers will face is how to finance that growth. Re-hiring, re-commissioning equipment, and re-stocking inventories will put substantial pressure on many companies serving the oil & gas energy sector.
A recent article published by the Junewarren-Nickle’s Energy Group projects a rapid increase in demand for services could come as early as September and that many oil & gas service companies will be caught off guard. Working capital will be in strong demand when this uptick in activity arrives and as always Liquid Capital will be well positioned and poised to service that demand.