The energy industry has inherent risks that dissuade banks from funding, specifically oil and gas. The main reasons are: 

• Volatility: the fluctuations of oil prices indirectly impact macroeconomic factors, including inflation, GDP growth and employment

• Oil field service companies are directly affected by the price of oil, falling below breakeven price halts all new drilling

• Some financial institutions don’t lend to the energy sector

Though these risks apply to private credit, their nimble flat organizational structure and lack of regulatory pressures allow them to tolerate and troubleshoot accordingly, making them an ideal alternative for the oil and gas industry.

For instance, one of our oil and gas clients saw the opportunity to expand, and purchased property on the same street to be used as their new facility. But their national bank decided to close their line of credit due to industry risk. In need of a working capital line more than ever, the firm was referred to Flatbay Capital.

Flatbay Capital BDO, Lili Tafilaj, worked closely with the company’s owners to understand their needs and goals. From there, we created a financing solution that provided a $1MM commercial real estate secured line of credit for working capital to expand their facility.

Do you have any oil and gas clients or have a oil and gas company in need of private capital from a non-bank entity? Learn about our financing options