A number of FinTech startups have emerged over the past couple of years bridging, in their own unique way, what’s believed to be a funding gap for Australian SMEs. A couple of examples include InvoiceBid, which allows businesses to get their invoices paid by investors when in need of immediate cash; and Moula, an online funding platform for small businesses in urgent need of access to capital.
The latest to enter this space is Sydney-based startup Waddle, addressing one of the most commonly cited pain points for small business owners: cashflow tied up in receivables. Founded by Leigh Dunsford, Waddle’s receivables-based online lending platform integrates directly with existing cloud accounting providers – also referred to as the ‘financial web’ – and allows SMEs to draw down funds against newly-created invoices in real-time.
Waddle believes there’s enormous opportunity to leverage data aggregated by cloud accounting providers and implement predictive modelling to deliver 100% automated debt capital to SMEs. This means that rather than having to wait up to 120 days for invoices to be paid by customers, Waddle’s “cash on demand” accounting add-on allows SMEs access to working capital within 24 hours that can be reinvested into the business. Up to $200,000 in flexible cash can be borrowed – there is no minimum loan amount, no loan terms and no fixed repayments – and interests rates start from 14.95% per annum.
Once the Waddle service has been initiated, the user’s accounting and banking data are automatically synced, and they’re not required to engage in manual loan application processes to draw funds. In fact, Waddle will automatically present loan offers based on the user’s data, essentially delivering real-time revolving credit lines and eliminating frustrations related to the administration and compliance associated with traditional receivables lending programmes in Australia and beyond.
Waddle’s proprietary technology has been eight months in the making. The startup has been working close with cloud accounting providers to develop transaction feeds, allowing business owners to view loan metrics such as loan balances, fees, funds available and charges without ever leaving their own accounting ecosystem. Waddle believes add-ons like itself add significant value to existing cloud accounting ecosystems. In fact, New Zealand-founded accounting software startup Xero is an example of a relatively new company that has been able to scale globally off the back its public API. Over 300 organisations have built entire companies or features off the back of Xero’s API and in turn have been pivotal to driving the platform to attract over 500,000 subscribers.
In a blog post, Waddle explains, “Truly valuable lending add-ons will keep business owners engaged in cloud accounting platforms, driving uptake to get access to new financing options that offer frustration free ways to raise working capital against their on-going receivables, close cash flow gaps from late paying customers and drive growth.”