A supplier or machine shop in Midland holds stock for customers who pay on their schedule. The cash question is how much sits on the shelf and in unpaid purchase orders.
Apply Now →| Stage | What it is | Cash status |
|---|---|---|
| Raw stock and bar, plate or fittings | Bought before a job exists | Paid |
| Work in process | Machine time, labor, tooling wear | Paid, not yet billable |
| Finished parts or assemblies | Waiting for pickup or delivery | Paid, not yet invoiced |
| Invoice outstanding | Delivered, awaiting payment | Earned, not received |
Four stages, and cash is gone from the account at the first one. A shop can be fully booked and still short of money, because every stage is financed from the shop’s own pocket until the invoice is paid.
Midland is a major center of American oil and natural gas production, set in the Permian Basin, which Wikipedia describes as the highest-producing U.S. oil field, averaging 4.2 million barrels a day in 2019. Customers there issue purchase orders readily, but they pay on their own accounting calendars. The shop then faces the same sequence every time:
Between steps two and four, you carry the cost. Several large orders at once multiply the carry. This is the purchase-order gap, and it is a timing problem rather than a demand problem.
Fast-moving fittings and consumables keep customers from going elsewhere. They also sit on shelves until sold. Track how many weeks each category lasts before you reorder.
A supplier may offer better pricing on a larger buy. If the stock turns quickly, the saving is real; if not, the cash is trapped.
Lower inventory risk, but customers can wait on you, and delivery speed then depends on how fast you can fund material.
Machine tools, lifts and trucks also need replacing or repairing, and a failed machine stops revenue the same day. Because a machine is a single asset with a clear purpose, equipment financing is usually the better comparison than general working capital. For recurring stock purchases, look at a business line of credit; for a one-time inventory buy, working capital may fit.
For illustration only, not our terms: if a shop has $120,000 of orders to fill and has to buy $50,000 of material up front, with customers paying after delivery, the gap is closer to $50,000 than $120,000. Request the gap plus a cushion for one delayed payment.
Funding runs from $25,000 to $5,000,000, funded in as little as 24 hours once the file is complete. The application takes about five minutes with a soft credit pull, and sole proprietors can apply. Compare the amount received, total repaid and repayment start date before you accept anything.
Nearby reading: the service-company page and hauling page, or fast funding. Ready? Apply here.
Material, labor and tooling are paid before the customer pays the invoice. More orders at once means more cost carried until payments arrive.
A single machine is usually a better match for equipment financing. Working capital suits inventory and payroll timing gaps.
Count the material and parts you must buy before payment arrives, not the total order value, then add a cushion for one late payment.
If you reorder the same categories often, a revolving line can match the cycle. Compare total repayment to the margin on the stock.
Yes. Sole proprietors can apply, and the application is about five minutes with a soft credit pull.
Three months of business bank statements and a 5-minute application. FICO 500+ considered. $25,000 to $5,000,000, funded in as little as 24 hours.
Apply Now →It takes about two minutes and it will not affect your credit score.
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