How we decide
to buy an invoice.
We are not lending to the supplier. We are buying a promise the mine has already made, in writing, in its own books. Everything below follows from that one fact.
Your neighbour agrees to pay you $50 for mowing the lawn, writes it in his notebook, and says he will pay at the end of the month. We give you $47 today. He pays us the $50 at the end of the month, exactly as he planned.
A diagram showing four steps before an invoice reaches us, the five questions we ask, and the three possible answers.
Why that matters
Because the risky part of lending — will this person pay me back? — has already been answered by someone else, in writing, before we arrive. Our job is to check that the promise is real, that nobody has sold it twice, and that the money can reach us.
The five questions, one at a time
Do the three papers agree?
An invoice on its own proves nothing. We need three things that agree: the supplier's invoice, a signature from the site saying the work arrived, and the mine's own accounting entry showing the amount it approved and the day it will pay. If the mine deducted something, we buy the smaller number. We never buy what was asked for; we buy what was agreed.
Has it been sold twice?
The oldest trick in this business is selling the same invoice to two different people. Every invoice we buy gets a fingerprint. If the same one comes back, from anyone, we see it immediately.
Is anything unusual?
A few things make an invoice worth a second look: a supplier whose owner turns out to share a bank account with the person at the mine who approves their invoices, work recorded on a day the site was shut, a sudden jump in amounts. We check for these before funding, not after.
Can the money actually reach us?
A promise we cannot collect is worth nothing. So we confirm that the entity owing the money is permitted to pay dollars into a bank account in the United States. If it is a local subsidiary, we need its parent to stand behind the payment. No exceptions, however good the invoice looks.
Do we know who this is?
Before a supplier's first invoice, we establish that the company exists, that the people who own it are who they say, that the bank account is in the company's own name, and that nobody involved appears on a sanctions list. Done once, redone whenever something changes.
What we never do
| We never send our own inspectors to a mine site. The mine checks the work before it approves the invoice; doing it twice would cost the supplier money for nothing. |
| We never buy an invoice for work not yet done. No purchase orders, no advances against future jobs. |
| We never ask the supplier for property, equipment or a personal guarantee. We are buying a promise from the mine, not lending against the supplier's things. |
| We never charge the mine anything, so its decision to approve an invoice is never influenced by us. |