A guide to invoice financing for mining services

Mining is one of the oldest and most established industries in Australia, but its success doesn't mean that it doesn't face cash-flow problems. As with any industry that relies on investment to meet demand but has long waiting periods to receive payment, any mining business can run into financial difficulty.

Invoice finance helps to unlock money that your business has already earned when you need it most, rather than when the invoice is due. With invoice finance, there's no need to wait for the capital that you need to meet your overhead or grow your business.

What is invoice finance for mining services?

Invoice financing is a method of funding for mining businesses that allows them to borrow money against their unpaid invoices. Mining companies usually have to wait 30-90 days for most invoice payments, and this can be disruptive when paying overhead such as quarterly costs. Invoice finance is a cash-flow tool that gives quick access to much needed capital within the mining industry.

Demand varies substantially and large orders require a large investment within the mining business. If you're waiting on client payments before you can fulfil the demands of the next order, you could be missing opportunities. Instead of letting cash flow be interrupted by slow-paying clients, you can fund up to 90% of your unpaid invoices by using a third-party finance provider.

Compare a range of invoice finance options

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Name	Product	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee	Apply Now
Waddle Invoice Finance		$10,000	$1,000,000	From 1 month	$0	Go to site More Info	Apply to borrow up to $1 million against your unpaid invoices and receive your approved funds within 48 hours. Note: Only available to incorporated companies.	Compare	loading Fetching your data...
Timelio Invoice Finance		$10,000	$100,000,000	Up to 4 months	$0	Go to site More Info	Get up to 100% of the value of your invoices without having to wait for customer payments, and with no minimum turnover or operating history required.	Compare	loading Fetching your data...
Scottish Pacific Invoice Finance		$200,000	$100,000,000	From 1 year	No set amount	Go to site More Info	Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $200,000 in invoices.	Compare	loading Fetching your data...
TIM Finance Invoice Finance		$100,000	$5,000,000	Up to 1 year	$0	Go to site More Info	Finance your unpaid invoices and receive your funds in 24 hours. Up to 90% of invoice is paid upfront. Note: Must have $1 million or more in annual revenue.	Compare	loading Fetching your data...
Scottish Pacific Selective Invoice Finance		$10,000	$1,000,000	1 to 3 months	$500	Go to site More Info	Finance your unpaid invoices on demand with terms of 1 - 3 months. 95% of invoice is paid upfront, with no minimum trading history required.	Compare	loading Fetching your data...

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How does mining invoice finance work?

There are two distinct types of invoice finance for mining services:

1. Invoice discounting
   Invoice discounting is a form of invoice finance that allows the borrower to retain control over debt collection. The company invoices its clients as usual, then forwards the invoice to the third-party provider. The provider then funds an upfront percentage of the invoice amount (70-95%).Clients pay the invoices directly to the lender by transferring the funds into a bank account that is issued in the mining company's name but managed by the invoice financer (this account is usually forwarded to the client upon invoice). The financer fee is then deducted from the retained 5-30% of the invoice amount, and the remaining funds are forwarded to the mining company. Invoice discounting usually has lower fees as invoices are not insured. If the client fails to pay, it is the responsibility of the mining company. The mining company is also still responsible for chasing up the client payment. Invoice discounting arrangements can remain undisclosed to customers, so there is usually no need to tell your clients that you are using a third-party finance provider.
2. Invoice factoring
   Invoice factoring is a more complete invoice finance service. The first part of the process is the same – the mining company invoices their clients as normal and forwards the invoices to the third-party provider, who then funds an upfront percentage of the invoice (usually 70-85%). Unlike with invoice discounting, invoice factoring providers effectively own the invoices and are responsible for collecting payments from customers. They are responsible for credit-checking customers, verifying invoices and are liable for any late payments or defaults, should they occur. Invoice factoring fees are usually somewhat higher, but they relieve some of the burden of debt collection and the in-house costs that usually go hand in hand with payment retrieval. Invoice factoring is a disclosed arrangement between the mining business and the client.

How can invoice finance benefit my mining business?

Mining industries require a lot of capital for trade, and due to recent climate concerns, acquiring a bank loan might prove more difficult now than it may have been in recent years. Luckily, many Australian invoice finance providers specialise in mining-service financing, so there is no shortage of finance opportunities. Going through a specialist company may also mean that you can find something that you can tailor specifically to your business's needs.

Even if you are not currently facing issues with cash flow, because of the fluctuations in price and currency within the mining trade, there is always a potential for financial risk involved in the industry. Invoice finance could be a viable safety net if you run into difficulties. Usually with invoice finance, businesses only pay for what they borrow, so if you don't require the service, you don't have to pay for it.

How much does invoice finance for mining services cost?

The cost of invoice financing for mining services varies depending on the annual turnover of your business, the size of your company and factors like whether you have any large outstanding company debts.

As they are short-term loans, invoice financing companies usually do not charge a p.a. interest rate, but instead charge a discount fee (a percentage of the invoice that is deducted as a charge based on the invoice amount) on funded invoices.

Different lenders will have different methods of charging for their services, so it is always worth checking with the provider what their charging system is prior to submitting an application.

How do I apply for mining invoice finance?

To apply for mining invoice finance, click "Go to Site" and submit an enquiry form with a chosen provider. Representatives usually get back in touch quickly and applications can be approved in as little as 24 hours (sometimes less).

To apply for invoice finance for mining services, you will likely need the following:

• Your name/business director's name
• The company name
• The company ABN/ACN
• The business data – average monthly sales, number of customers

It is always a good idea to compare invoice finance providers carefully and find the right fit for your business prior to making a commitment.

Bria Horne

Bria is a writer for Finder, with a specialist knowledge of personal loans, car loans and business loans. Originally from the UK, Bria has been a professional personal finance writer in Australia for over 2 years. She has an M.A and B.A in Philosophy and Literature from the University of Sussex, and previously worked on the UK’s leading hospitality publication.