Rental Purchase Option (RPO)
Stay agile, control cash flow, and grow your fleet
Rig Source’s Rental Purchase Option (RPO) is a game-changing solution designed for today’s drilling contractors who want to stay agile, control cash flow, and grow their fleet without jumping through the hoops of traditional financing.
Unlike bank loans that often require 5+ years of business history, personal guarantees, and piles of paperwork, Rig Source’s RPO puts you in control. It’s especially valuable for growing companies that have been in business for less than three years and are routinely turned away by banks and finance companies.
With our RPO program, every monthly rental payment builds equity towards ownership, reducing your final buyout cost month after month. For many customers, this drops the remaining balance (purchase price) below the $350,000 threshold in place with banks, allowing for simple credit app-only financing through banks if needed, saving valuable time, money, and the back-and-forth with accountants or office staff.
Rig Source’s RPO program is built with business owner and contractor realities in mind:
No long-term commitment: Return the rig, purchase it, or swap it for a different unit at any time.
Low risk, high flexibility: If you spec’d the wrong machine, outgrew your need, or want to upgrade, you’re not locked in.
Built-in exit strategy: Peace of mind knowing you’re never stuck with a rig that doesn’t fit your operation. And if you choose to return it, you avoid the depreciation hit typically associated with ownership.
Rig Source’s RPO program delivers the flexibility of renting with the equity-building benefits of ownership. It’s equipment acquisition made simple, smart, and strategic.
Instances where customers will forfeit rental credits previously earned:
- They return the rig on RPO and choose not to purchase it.
- They decide that the rig on RPO is not the correct rig for their operations and wish to swap it out with a different make/model. In this case, the original RPO is terminated, and a new one will be established with updated pricing, terms, and conditions, and start/end dates.
- They cannot close on the purchase within the 60-day grace period (explained below) of the RPO expiration.
Requirements from the customer:
- Credit app received or currently on file and recent (received within the last 3 years).
- Reverse ACH or Credit Card authorization in place with approval to process monthly payments according to the invoice schedule.
- Signed rental purchase option contract and insurance certificate in place.
- First month rental and shipping received prior to the rig leaving Rig Source’s yard.
RPO Grace Period:
- If the equipment under RPO contract cannot be purchased by the RPO expiration date, there is a two-month grace period that allows the customer to keep their existing rental credits while they work on financing.
- During the grace period, a standard rental invoice will be generated, and the customer will not earn rental credits on it.
- If the customer closes on the RPO during the middle of a standard rental term during the grace period, any unused rental time will be credited to the customer’s account.
- Formal language outlined in the latest RPO contract is the following: If the Rental Purchase Option (RPO) is not exercised on the RPO Execution Date, rental credits will be retained for up to two additional billing cycles. During this period, monthly rent must still be paid, but no further rental credits will accrue. If the purchase is not completed within this grace period, all previously earned rental credits will be forfeited, and the agreement will convert to a standard month-to-month rental.
Standard RPO Program Terms – New and Used equipment, excluding NEW Fraste rigs:
- Option 1: 1-month try-and-buy. 100% of the first month’s rental applies to the purchase if the purchase is made by the end of the first rental period
- Option 2: Three-month RPO: A 80/20 split of rental payments will be applied to the purchase price. In this case, 80% of the monthly rental payments will be applied to the purchase price for up to three rental cycles.
- Option 3: Six-month RPO: Months 1-3 earn 80% equity, and months 4-6 earn 70% equity on the monthly rental invoices.
- A two-month grace period is effective for all options listed above. See Grace Period terms above.
RPO terms for all NEW Fraste rigs - Used Fraste rigs will fall under the standard RPO program terms.
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- Three-month RPO: 100% of the first three rental periods apply to the purchase price.
- A six-month option is available under the six-month terms outlined above.
- A two-month grace period is effective for all options listed above. See Grace Period terms above.