Skip to main content

Oil and gas firm defies the sector’s downturn with help of Siemens Financial Services

Published by
Oilfield Technology,


Great Yarmouth-based oil and gas firm, Epic International Ltd, has significantly improved its cash flow, despite a dip in the sector’s performance, by using invoice finance provided by Siemens Financial Services.

Launched in 2000, Epic provides technical manpower to the oil and gas industries and delivers modifications and upgrades to brownfield sites. As a result of the falling price of oil, many companies in the sector have been challenged and over the past year some of Epic’s customers have extended their payment terms from 30 days to 45 or 60 days. This was having a detrimental impact on Epic’s cash flow.

David Rowan, Managing Director, Epic International Ltd explains: “It’s understandable that when a sector is struggling, companies would look to give themselves longer to pay their bills. But this has a knock on effect for others. Our biggest capital expenditure by far is our wage bill, so to avoid paying staff late – or even worse laying them off – it’s essential we bridge the gap between providing a service and being paid for it.”

By using invoice finance, up to 90% of the approved invoice total can be immediately advanced by the finance provider, with the remaining 10% paid once their customer settles the balance. This provides the company with essential working capital so it can then invest in expanding its business without having to wait for bills to be paid.

Epic initially used an invoice finance service provided by their high street bank. With the oil and gas sector experiencing tough times however, the bank changed its invoice finance terms and restricted the funding made available.

“Unfortunately, the bank did not take the time to understand our business or the challenges we were facing. Restrictions to the service meant that it was becoming less useful,” says David.

“We became aware that Siemens Financial Services (SFS) were also offering an invoice finance service,” he continues. “We were, of course, aware of the Siemens brand and that was definitely a draw. It’s reassuring to work with an established company.”

SFS met with Epic regularly to fully understand the company and its requirements. Through several meetings, which involved senior SFS staff from the beginning, strong relationships were built. SFS explained the benefits of transferring the service from the bank and how the transition could be managed. A tailored and flexible system was established, incorporating quick drawdown and low costs, and was successfully launched in March.

Drawdown of funds now only takes a matter of hours, whereas before it took a couple of days. SFS’ online system also gives Epic real-time access to funding and payments, and allows them to retain responsibility for credit control. In addition, the company has a dedicated account team that responds to any questions or queries quickly.

“The system is working better than we hoped,” says David. “We’d definitely encourage other companies in our sector to look at financing tools like invoice finance, and also to look at providers other than banks.

“We are looking forward to building on our existing relationships and working with Siemens more closely in the future.”

Simon Penn, Head of Invoice Finance Sales for London & the South East at Siemens Financial Services adds: “Many companies we work with have said that when times get tough in their sector banks often tighten the funding they make available. SFS has a strong history of supporting customers through downturns and taking time to understand the challenges. We also work with our customers to build a tailored service, which many banks are unwilling or unable to do.


Adapted from a press release by David Bizley

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/10062016/oil-and-gas-firm-defies-sector-downturn-with-help-of-siemens-financial-services/

 

Embed article link: (copy the HTML code below):