Inside Waddle

From fashion to food. Just how did this wholesaler fund his dream?

Posted by Nick on 22-Mar-2018 09:00:38

Brett Monaghan dreamed of returning to Australia and starting his own organic food business. A fashion photographer in his previous career, Brett grew bored of chasing the latest fashionistas from Milan to Madrid, so he returned home to start his own manufacturing and wholesale business.


“I wanted to create really healthy food, that tastes just as great as it is healthy.” As a business owner, Brett knew he would have to run an efficient organisation and that those early decisions would be crucial for success.

Finalising the recipes, registering an ABN and deciding on the business name, Eclipse Organics was born with the help of his business partner Jonny.

“Without the skills that both Jonny and I brought into this business, we would have found it nearly impossible. We’ve done most things ourselves. From images and packaging design to our internal file-maker production system. Without this, we wouldn’t have been able to play so soon.”

— Brett - Managing Director, Eclipse Organics

 Like most entrepreneurs, Brett and Jonny need to wear many hats, so saving time wherever possible is vital. Cloud accounting was an obvious choice for the mundane accounting tasks such as inventory, fulfilment and finance. “We chose Xero because it was simple to use. More recently we have selected a couple of Xero add-ons, including Waddle, which has further automated our processes.

Eclipse was being paid up-front when they first started out, however it wasn’t long before they started to attract the attention of some of the larger distributors. Larger buyers demanded payment terms which extended invoice payments out to sixty days and more. This situation is typical of many growing businesses and it poses a real challenge for them to source the capital they need to fund the payment gaps.

Brett did his best to negotiate shorter payment terms with his customers and longer terms with his suppliers. Brett also established an automated payment collections system to ensure that payments were being made on time.

With growing orders came the requirement for more staff, so Brett was now on the lookout for the right finance product to fund his growth.

Funding Options

Brett turned to his bank and applied for an overdraft to fund the growth, and following several weeks of waiting to hear back from them, Brett was finally offered far less than he needed and to make matters worse, the bank demanded his property as security.

“We’re just too different for the banks to understand, and our high rate of growth just does not fit a standard overdraft or loan. We needed to find a funding stream that would grow with us and be as fluid as we are.”

“Space, equipment and ingredients. They all come down to funds and cash-flow.”

— Brett, Managing Director - Eclipse Organics

Brett knew he needed a creditline that would grow with his sales, and he was referred by the bank to a lending product called invoice financing. This would allow him to establish a line of credit against his unpaid invoices, which is not tied to the equity in his property. The borrower draws down funds against open invoices and customer payments replenish the creditline. This type of credit line is often referred to as a ‘revolving line of credit’ and this means Brett can effectively be paid on day 1. Traditionally reserved for larger businesses, invoice finance is well suited to the wholesale industry. Brett can use his invoices as security for a lower rate whilst accessing a high credit limit to fund his growth.

There are significant differences even amongst invoice financiers, and the devil is always in the detail. ‘Traditional” invoice finance products do come with a few key drawbacks. They’ll usually contact your customers to follow up unpaid invoices, which can negatively affect your reputation, and they’ll often require considerable administration time as invoices and other documentation is constantly being provided to the lender. These are characteristics of invoice finance solutions that hailed from a bygone era, and unfortunately, some still exist today. The good news is that technology has been leveraged by financiers like Waddle to provide a modern alternative to ‘traditional’ invoice financing.

Waddle. Different. Better for business

With the growing popularity of cloud accounting amongst Australian businesses, it made sense to automate business funding, so that business owners are able to ‘self-serve’ their financial needs. Financiers like Waddle can now leverage Application Programming Interface (API) technology to automate the entire lending process, removing the paperwork required by traditional lenders. Business owners that use Xero, MYOB, Quickbooks or Netsuite can link their account to the lender for an instant finance offer.

Ongoing administration is almost non-existent, thanks largely to the data sharing. SMBs can raise an invoice and drawdown funds against it instantly. Real-time access to funds facilitates payment to suppliers; payment of wages; payment of expenses, without performing any further processes outside of their regular accounting duties.

The advances in technology also reduce funding costs, as business owners can borrow only what they need when they need it, never missing an opportunity to grow their business. Easy access to funds has solved Brett’s growing pains and Eclipse Organics continues to thrive. “The cost and time saving provided by Waddle just made sense.” Choosing an offline funding option was never a consideration for this tech-savvy entrepreneur.

Get in touch to find out more about modern invoice finance for the wholesale and manufacturing industry.


Topics: Client Growth Stories, debtor finance, Invoice Finance, Manufacturing, Wholesalers

Inside Waddle

Every business needs easy access to low-cost working capital. Subscribe to our blog to receive updates about invoice financing and to read about the impact that modern invoice financing is having on Australian businesses.


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