Waddle entered the Australian alternative business lending industry last year with an aim to provide a “bank-like” experience to SMEs — without the bank. Today, the company is announcing a new initiative to further that mission, and it includes a partnership with SME accounting firm Xero.
On Monday (April 18), Waddle revealed a joint venture with cloud-based SME accounting company Xero to launch an invoice financing product. The new lending type will use data automatically aggregated from accounting information within the Xero platform.
According to Waddle, financing can be drawn against outstanding invoices as soon as they are created and sent to a buyer.
The company specified in its announcement that its invoice financing tool is not a traditional factoring solution because businesses are not selling their outstanding invoices to a third-party financier through a manual lending service.
Waddle’s new service allows Xero small business users to opt in to a service to automatically assess invoices and offer a revolving credit line.
In a statement, Waddle Cofounder Leigh Dunsford said Xero’s ability to automate data entry and analysis for invoice financing is crucial to its new offering, and the invoice financing solution is looking to shift Waddle’s perception in the alternative lending industry.
“Before you liken Waddle to any other alternative lending firm, consider that Waddle only caters for companies that constantly wait for invoice payments to grow or pay suppliers,” Dunsford said.
“Waiting for customer payments is a billion-dollar problem that B2Bs deal with on a daily basis and a major technical issue that we’ve been able to solve, delivering a simplified product purely matched to their cash flow,” the executive continued.
The company noted that financing rates start at 9.95 percent a year and that credit can be provided to a business within one business day.