For winemaker Patrick Sullivan, financial support from Export Finance Australia to fill early cashflow gaps helped set the business up for export success.
When Victorian winemaker Patrick Sullivan started making biodynamic wines in 2011, he knew export was part of his plan to keep his business strong.
“We wanted to spread the customer base around so we could get consistent trade year after year” said Sullivan. “It doesn’t put any pressure on a particular market and can be an advantageous way to structure our costs and payments.”
With strong international demand, the main challenge for Sullivan wasn’t creating an export market for his wines, but managing the long lead times between production and payment.
“I’ve generally paid to produce a wine two years before I sell it. If you add shipping times in, it can be almost three years from when I first invested the cash,” said Sullivan. “It's incredibly difficult to maintain a healthy cashflow when you're not getting paid for three years.”
Finance to close the cashflow gap
Sullivan approached Export Finance Australia for help after realising a bank loan wasn’t a viable option for accessing critical finance to help him fulfil export contracts.
He applied for a A$71,000 Small Business Export Loan to help finance the costs of fulfilling a purchase order from an overseas buyer. He said the process was fast and seamless.
“It’s pretty easy. They fill in the documents, apply the purchase orders, and a week later, you have the funds.”
According to Sullivan, the funds helped him pay for essential production costs, like bottling, that have short payment terms, so he could deliver on larger shipments.
“What Export Finance Australia allowed me to do is basically maintain a really good export base and maintain a good level of service to my customers,” he said.
“The loan has taken the stress out of things. By stretching out the cashflow they take all the heat out of the transaction.”
Today 50% of Sullivan’s customers are in Japan, Korea, Hong Kong, China, Scandinavia, New Zealand, Canada and the United States. He says that having financial support from Export Finance Australia to fill those early cashflow gaps, has helped set his business up for a more successful future.