Looking for ways to control costs? Financial solutions can enable efficiency gains
When miners look for ways to control costs, improving efficiency is a typical first step. And one of the primary places they seek these efficiency gains is through the performance of their equipment. How can they better train operators to ensure they are working as productively as possible? How can they improve site conditions that may be impacting cycle times? Should they consider newer machines that have the latest efficiency updates?
One thing they may not consider is how financial solutions play a role in making these cost-control and efficiency improvements a reality. The experts at Cat Financial, a captive lender of mining equipment manufacturer Caterpillar, offer four things to consider:
- Consider machine replacement options.
While new equipment may be more efficient, sometimes it’s not realistic to purchase new machines. Rebuilding equipment maximizes the value of a purchase that has already been made, incorporates efficiency improvements and improves availability — at a lower cost. And financing or deferring payments for rebuilds can make it even more cost-effective. Another option is to purchase used equipment or lease newer machines — both options that can improve efficiency without the significant capital investment of a new piece of equipment.
- Invest in technology.
While spending money to acquire technology may seem counter-intuitive, it can pay for itself very quickly. In fact, Caterpillar reports that most of its technologies for mining can deliver a return on investment in less than a year. Technologies make it possible for miners to optimize every aspect of their operations. To help customers take advantage of the efficiency gains technology can deliver, Cat Financial offers assistance. The lender can bundle financing for equipment and technology purchased together, as well as work with customers who buy technology separately.
- Consider credit.
For mining companies looking to improve cash flow, Cat Financial suggests setting up a revolving line of credit to cover expenses like parts, service, attachments, rentals and even technology. Cat Financial’s Commercial Account, for example, works like a credit card for its customers in the United States, Canada and Japan. Some accounts offer the option to pay a percentage of the balance every month, with the remainder charged a low interest rate.
- Work with your lender.
If mining companies need additional help to improve cash flow, most lenders are willing to explore other options. Cat Financial, for example, will work with miners to modify existing contracts, including “skip” payments, to align debt service with an operation’s cash flow. That flexibility extends to new machines as well. Sometimes it may take several months before new equipment is up and running on site and lenders may defer payments during that time. Working capital loans are also an option for mines looking to inject cash into their operations.
Learn more about Cat Financial
As part of the Caterpillar family, Cat Financial shares a commitment to supporting the mining industry with capabilities to offer everything from leasing and general financing to project and structured financing, as well as equipment protection plans and extended service coverage. The organization has industry expertise with a presence in every mining market.