MapleX, a thriving name in the personal care market, is crafting its niche with a unique product: Castile Soaps infused with Canadian Maple Syrup, a
MapleX Naturals: Leveraging Invoice Funding for Seamless Growth
MapleX, a thriving name in the personal care market, is crafting its niche with a unique product: Castile Soaps infused with Canadian Maple Syrup, a rich source of antioxidants that boost skin health. With booming demand, the challenges of managing cash flow are persistent.
Industry Trends and Challenges
The personal care industry has significantly evolved with the digital era, creating an intensely competitive landscape in North America. The rise of e-commerce has allowed many new brands to enter the market, increasing competition both online and in physical stores.
One of the major shifts in this sector, particularly noticeable in Consumer Packaged Goods (CPG), is the extension of payment terms by large retailers. It’s now common to see payment terms stretching from the usual 30-60 days to longer periods like 60-90 days, and sometimes even up to 120 days. This trend poses a challenge for growing brands that need steady cash flow to manage their day-to-day operations, from stocking up on materials to marketing their products.
The key challenge for MapleX Naturals is how to keep the business growing while managing new orders – all when the money from sales takes longer to come in.
A fresh brand in the personal care sector, the Canadian essence resonates in its products. Apart from natural vegetable ingredients, MapleX uses Canadian Maple Syrup, a product known to enhance skin health in addition to being a popular condiment.
Led by Dave Thompson, who transitioned from finance to personal care, MapleX aimed to grow beyond online sales. Dave’s financial expertise was instrumental, but challenges like traditional bank loans and alternative finance lending criteria became roadblocks.
The Challenge: Managing Cash Flow Effectively to Drive Growth
With five unique fragrances, a cross-border supply chain, and long payment terms, MapleX faced the bottleneck many growing companies do: slow and inconsistent cash flow. The big question Dave confronted: How to secure optimal funding for growth and bypass these bottlenecks?
“While we started as self-funded, there came a point where it wasn’t feasible anymore,” Dave shares. Despite purchase orders from major brands, the absence of a robust credit history caused banks to deny their requests for financing. Alternative lenders had their own stringent criteria that didn’t fit MapleX’s business plan, like proof of office rental space.
The Turning Point: Embracing Invoice Financing as a Strategic Solution
MapleX Naturals turned to a familiar solution from CEO Dave Thompson’s finance background: invoice financing. This approach, aimed at quickly converting outstanding invoices into cash, led them to discover FundThrough’s invoice funding services, which precisely addressed their need for accelerated cash flow.
Reasons Growing CPG Businesses Work with FundThrough:
- Quick Access: MapleX could finance outstanding invoices promptly.
- Flexibility: With FundThrough’s flexible model, MapleX could selectively fund invoices based on their immediate needs, providing crucial funding on short notice.
- Growth with Peace of Mind: Invoice funding ensured the business always had could grow production, especially when clients ordered more products before clearing previous dues.
- Dedicated Support: FundThrough provided personalized client support, ensuring that MapleX had the guidance and assistance they needed to keep their business well-capitalized.
- Support during COVID-19: With extended payment terms during the pandemic, FundThrough was pivotal for MapleX to manage its cash flow efficiently.
“[FundThrough] allows us to develop the business faster. It gives us the confidence to go forward with cash flow to cover immediate expenses, particularly for a small business as we initially struggled with cash flow.”
The Road Ahead
Invoice funding has not only improved MapleX’s operations through smoother cash flow, but also bolstered relations with suppliers. Dave stresses the importance of timely payments to them, “With monthly expenses, waiting 90 days for payment is strenuous. Some companies might not survive waiting for their second or third payment.“
With the ability to execute production and distribution processes more quickly, thanks to improved cash flow, the future looks promising for the company. MapleX is well-prepared for expansion, with a lineup of new products scheduled for release in the coming year.
“We owe a chunk of our growth to the team we’ve built, including FundThrough,” concludes Dave.
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