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Our Working Capital Solutions are Ideal for Service Companies

December 27, 2022

Service companies in heavy industries often encounter cash flow challenges waiting to receive payment for services rendered.

Texas Gulf Bank works with companies that are typically awarded large jobs that require an outlay of large amounts of cash to provide the service and then wait months to receive payment for their services. In the meantime, funds are needed for payroll and other short-term expenses to run a business.

This interim period can be challenging to manage without access to capital resources. That’s why we offer working capital solutions for our business customers. Consider the benefits of our support.

Interested in a complimentary
consultation with one of our bankers?

Which Companies Are Ideal for Working Capital Solutions?

Many of our customers along the Texas Gulf Coast are in the oil and gas industry. We help service providers cover the gap between providing a service for significant jobs and receiving payment from their customers.

For example, your company may need to rent or purchase large pieces of equipment and recruit hundreds of workers to complete a job for a Fortune 500 oil and gas company. If you don’t have enough cash on hand to cover the cost of the job, you could face a financial shortfall. A working capital loan can bridge the gap.

We work with companies in other industries that receive large order requests and usually must wait an extended period of time to receive payment for services they provide:

  • Manufacturing
  • Transportation
  • Fabrication
  • Construction
  • Communication
  • Staffing

​​A working capital loan allows your company to access capital based on the future income you expect to receive once the job is complete, recorded as Accounts Receivable (A/R). Among other factors, we utilize the amount billed to help determine the loan amount. In other words, the loan amount will be based on a percentage of eligible Accounts Receivable.

Our goal is to ensure that applicants meet the initial criteria for working capital financing. We look for customers that fit this profile:

  • Have an Accounts Receivable base that is current, meaning accounts are paid in 30 days or less.
  • Need working capital to cover operating and payroll expenses during the Accounts Receivable collection period.

If your company meets these baseline requirements, we recommend that you apply for a working capital loan through our bank.

Loan Application Requirements for Working Capital Solutions

When applying for a loan through our bank, we will review specific information about your company to validate that you are in good standing to be approved for financing included but not limited to:

  • Strength of your customer base.
  • Your company’s balance sheet condition.
  • The earnings history of your company.
  • The number of years in business to ensure your longevity.
  • Personal credit of the individual guarantors backing the loan.

We may also request information about the service you will provide to your customer. Reviewing information about the job will provide us with insights into key factors about the job:

  • The expected time commitment to complete the job.
  • The amount of time your Accounts Receivable will be outstanding.
  • When you expect to receive payment to support repayment of the loan.

The combination of reviewing your company history and gathering information about the service to be provided will help our lenders identify the best lending solution for your company.

Also, the more information you provide will assist with our internal loan review process. If approved for a loan, you may realize an expedited loan approval process to access the financing you need to cover expenses and meet your customer’s project timeline.

Why Texas Gulf Bank for a Working Capital Loan?

We are confident you will enjoy the Texas Gulf Bank experience. We have a deep understanding of the market and a strong history of supporting service providers through our business loans and commercial financing options.

For over 110 years, we have provided lending solutions tailored to our business customers’ needs. We have built strong relationships with companies in oil and gas, manufacturing, and other service industries along the Southeast Texas Gulf Coast. Our customers typically receive this experience:

  • Access to a local lender to manage the loan application process.
  • The support of our lending specialists, who understand how to structure loans that fit your specific need.
  • A streamlined loan approval process through our loan committee.

Let’s talk about how our working capital solutions can help your company provide services to customers with confidence. Contact us today to schedule a consultation with one of our lenders. You can also complete our contact form to get started.

All Loans Subject to Credit Approval