diff --git a/Language/Haskell/GhcMod/CabalHelper.hs b/Language/Haskell/GhcMod/CabalHelper.hs
index f525d40..0fa2fee 100644
--- a/Language/Haskell/GhcMod/CabalHelper.hs
+++ b/Language/Haskell/GhcMod/CabalHelper.hs
@@ -21,7 +21,6 @@ module Language.Haskell.GhcMod.CabalHelper
   , getGhcMergedPkgOptions
   , getCabalPackageDbStack
   , getStackPackageDbStack
-  , getCustomPkgDbStack
   , prepareCabalHelper
   )
 #endif
@@ -43,6 +42,7 @@ import Language.Haskell.GhcMod.Utils
 import Language.Haskell.GhcMod.PathsAndFiles
 import Language.Haskell.GhcMod.Logging
 import Language.Haskell.GhcMod.Output
+import Language.Haskell.GhcMod.CustomPackageDb
 import System.FilePath
 import System.Directory (findExecutable)
 import System.Process
@@ -139,18 +139,6 @@ prepareCabalHelper = do
   when (cradleProjectType crdl == CabalProject || cradleProjectType crdl == StackProject) $
        withCabal $ liftIO $ prepare readProc projdir distdir
 
-parseCustomPackageDb :: String -> [GhcPkgDb]
-parseCustomPackageDb src = map parsePkgDb $ filter (not . null) $ lines src
- where
-   parsePkgDb "global" = GlobalDb
-   parsePkgDb "user" = UserDb
-   parsePkgDb s = PackageDb s
-
-getCustomPkgDbStack :: (IOish m, GmEnv m) => m (Maybe [GhcPkgDb])
-getCustomPkgDbStack = do
-    mCusPkgDbFile <- liftIO . (traverse readFile <=< findCustomPackageDbFile) . cradleRootDir =<< cradle
-    return $ parseCustomPackageDb <$> mCusPkgDbFile
-
 getStackPackageDbStack :: IOish m => m [GhcPkgDb]
 getStackPackageDbStack = do
     mstack <- liftIO $ findExecutable "stack"
diff --git a/Language/Haskell/GhcMod/CustomPackageDb.hs b/Language/Haskell/GhcMod/CustomPackageDb.hs
new file mode 100644
index 0000000..ce548eb
--- /dev/null
+++ b/Language/Haskell/GhcMod/CustomPackageDb.hs
@@ -0,0 +1,25 @@
+module Language.Haskell.GhcMod.CustomPackageDb where
+
+
+import Control.Applicative
+import Control.Monad
+import Control.Category ((.))
+import Data.Maybe
+import Data.Traversable
+import Language.Haskell.GhcMod.Types
+import Language.Haskell.GhcMod.Monad.Types
+import Language.Haskell.GhcMod.PathsAndFiles
+import Prelude hiding ((.))
+
+
+parseCustomPackageDb :: String -> [GhcPkgDb]
+parseCustomPackageDb src = map parsePkgDb $ filter (not . null) $ lines src
+ where
+   parsePkgDb "global" = GlobalDb
+   parsePkgDb "user" = UserDb
+   parsePkgDb s = PackageDb s
+
+getCustomPkgDbStack :: (IOish m, GmEnv m) => m (Maybe [GhcPkgDb])
+getCustomPkgDbStack = do
+    mCusPkgDbFile <- liftIO . (traverse readFile <=< findCustomPackageDbFile) . cradleRootDir =<< cradle
+    return $ parseCustomPackageDb <$> mCusPkgDbFile
diff --git a/Language/Haskell/GhcMod/GhcPkg.hs b/Language/Haskell/GhcMod/GhcPkg.hs
index 1d7d2d2..ef06b09 100644
--- a/Language/Haskell/GhcMod/GhcPkg.hs
+++ b/Language/Haskell/GhcMod/GhcPkg.hs
@@ -22,6 +22,7 @@ import Language.Haskell.GhcMod.Types
 import Language.Haskell.GhcMod.Monad.Types
 import Language.Haskell.GhcMod.CabalHelper
 import Language.Haskell.GhcMod.PathsAndFiles
+import Language.Haskell.GhcMod.CustomPackageDb
 
 ghcVersion :: Int
 ghcVersion = read cProjectVersionInt
diff --git a/Language/Haskell/GhcMod/PathsAndFiles.hs b/Language/Haskell/GhcMod/PathsAndFiles.hs
index ca80bbd..47dc090 100644
--- a/Language/Haskell/GhcMod/PathsAndFiles.hs
+++ b/Language/Haskell/GhcMod/PathsAndFiles.hs
@@ -264,8 +264,9 @@ pkgDbStackCacheFile :: FilePath -> FilePath
 pkgDbStackCacheFile dist =
     setupConfigPath dist <.> "ghc-mod.package-db-stack"
 
--- | @findCustomPackageDbFile dir@. Searches for a @.ghc-mod.cradle@ file in @dir@.
--- If it exists in the given directory it is returned otherwise @findCradleFile@ returns @Nothing@
+-- | @findCustomPackageDbFile dir@. Searches for a @ghc-mod.package-db-stack@ file in @dir@.
+-- If it exists in the given directory it is returned otherwise @findCradleFile@
+-- returns @Nothing@
 findCustomPackageDbFile :: FilePath -> IO (Maybe FilePath)
 findCustomPackageDbFile directory = do
     let path = directory </> "ghc-mod.package-db-stack"
diff --git a/Language/Haskell/GhcMod/Target.hs b/Language/Haskell/GhcMod/Target.hs
index f1072ca..428b776 100644
--- a/Language/Haskell/GhcMod/Target.hs
+++ b/Language/Haskell/GhcMod/Target.hs
@@ -37,6 +37,7 @@ import Language.Haskell.GhcMod.Types
 import Language.Haskell.GhcMod.Utils as U
 import Language.Haskell.GhcMod.FileMapping
 import Language.Haskell.GhcMod.LightGhc
+import Language.Haskell.GhcMod.CustomPackageDb
 
 import Data.Maybe
 import Data.Monoid as Monoid
@@ -270,10 +271,11 @@ packageGhcOptions = do
       _ -> sandboxOpts crdl
 
 -- also works for plain projects!
-sandboxOpts :: MonadIO m => Cradle -> m [String]
+sandboxOpts :: (IOish m, GmEnv m) => Cradle -> m [String]
 sandboxOpts crdl = do
+    mCusPkgDb <- getCustomPkgDbStack
     pkgDbStack <- liftIO $ getSandboxPackageDbStack
-    let pkgOpts = ghcDbStackOpts pkgDbStack
+    let pkgOpts = ghcDbStackOpts $ fromMaybe pkgDbStack mCusPkgDb
     return $ ["-i" ++ d | d <- [wdir,rdir]] ++ pkgOpts ++ ["-Wall"]
   where
     (wdir, rdir) = (cradleCurrentDir crdl, cradleRootDir crdl)
diff --git a/README.md b/README.md
index 28b1b3e..b06463a 100644
--- a/README.md
+++ b/README.md
@@ -47,7 +47,7 @@ all sorts of nasty conflicts.
 
 ## Custom ghc-mod cradle
 
-To customize the package databases used by `ghc-mod`, put a file called `ghc-mod.cradle` beside the `.cabal` file with the following syntax:
+To customize the package databases used by `ghc-mod`, put a file called `ghc-mod.package-db-stack` beside the `.cabal` file with the following syntax:
 
 ```
 temp directory root
diff --git a/ghc-mod.cabal b/ghc-mod.cabal
index a403a26..20347be 100644
--- a/ghc-mod.cabal
+++ b/ghc-mod.cabal
@@ -110,6 +110,7 @@ Library
                         Language.Haskell.GhcMod.Check
                         Language.Haskell.GhcMod.Convert
                         Language.Haskell.GhcMod.Cradle
+                        Language.Haskell.GhcMod.CustomPackageDb
                         Language.Haskell.GhcMod.Debug
                         Language.Haskell.GhcMod.Doc
                         Language.Haskell.GhcMod.DynFlags