Oil & Gas extraction
The company obtained $500,000 to cover funding needs and maintain a stock that will enable it to sell more consistently.
Deal Summary
Product
Factoring
Funding Line Amount
$500,000 USD
Company Type
Rental machinery for Oil & Gas extraction
Industry Type
Oil & Gas
Location
Mexico
This Mexican company provides specialized products and services for drilling and extraction in the oil and gas industry. Since 2012, they have provided drilling tools and equipment, including wedges, hand wrenches, elevators, drill pipes, casing spiders, flow dividers, flow splitters, flow dividers, and spacer reel.
Despite the sharp drop in oil prices, the Mexican hydrocarbon industry is one of the most attractive. Likewise, the energy reform represents a window of opportunity to increase Mexico’s GDP and compete with regions in other parts of the world.
Challenge
The most urgent goal of this firm is liquidity to reduce cash flow for its fiscal years. The main challenge is to maintain sufficient inventory to meet customer demand. Although it already has an equity base, one of its leading suppliers requires long production lead times for orders. In addition, this company does not have couplings, which is the most requested product in this industry, resulting in a shortage of products at certain times of the year.
The company cannot make purchases and depends on its customers to finance new orders due to a lack of liquidity. This is a common issue for small companies with excellent growth potential; they need a working capital cycle to grow.
Solution
With ExpoCredit’s financing solution, the company obtained $500,000 in financing to cover part of its funding needs and maintain a stock that will enable it to sell more consistently. This allows the company to expand its customer portfolio and continue to grow.
The financing allows it to reduce expenses, which results in greater efficiency and generates more sales. These advantages are pertinent thanks to the current need for energy in North America and the Mexican government’s intention to develop this sector by at least 4.5% by 2022.
