Tackling longer payment terms
InvoiceX, a recently established Australian loan company, has unveiled a new invoicing scheme to help struggling mining companies overcome the new challenges created by long payment terms. This comes following this year’s likely liquidation of Queensland nickel and Arrium’s voluntary administration.
As banks are more likely to offer loans for land and real estate rather than liquid assets often incurred by mining, director of InvoiceX Dermot Crean questioned their motives.
“What is the intent here? To put them [workers] out of business?” he asked, pointing to Rio’s now redacted decision.
The company, which distinguishes itself from other peer to peer lending groups and consider themselves a market planner, has implemented a system, backed by private investors and the director’s own funding, that gives companies financial assistance upfront to fill the looming invoice gaps.
This funding ensures payment of workers despite creditor difficulties. The average repayment period was 51 days and with the company, repayments are offered between 30 and 90 days. A three per cent interest rate is given for 30 days and 10 per cent for 90 days.
Another director of InvoiceX, Steve Yannarakis, said that all companies have this issue, “cashflow is a problem worldwide.”
One of the main points both directors stressed about their company is their emphasis on transparency, with their website providing an anonymous list of business dealings.
Started only four years ago, the directors said they are the only company in Australia to offer this position.
