Embedded Lending: When Brands Offer Financing to Their Customers
Marketplaces, platforms and software companies hold data on their customers that no bank has access to: realtime sales, profit margins, growth compared to everyone else on the platform. With embedded lending, these companies can offer credit at the point of need, inside the platform the customer already uses. Typically they work with infrastructure providers that handle the licence, compliance and funding, but they remain the brand solving their customers' problems.
This page is for non-financial companies working out whether to build it, and how.
What it is
Plenty of things get labelled embedded lending these days.
We look at it from two angles, and we are strict on one of them:
Embedded
A non-financial brand offers the financial product as part of its own offering. The brand owns the product and the customer relationship. Financing appears inside the platform the customer already uses, the offer is built on data the platform already holds, and the customer never leaves to apply somewhere else. If any of that is missing, it is distribution, not embedded finance.
Lending
The product itself can be almost anything: working capital and revenue-based finance, buy now pay later, invoice financing, instalment credit at checkout, equipment and asset finance. Money moves now and is repaid later. B2B and B2C both count.
How it looks in practice
Three European companies can serve as (random) examples of why they have launched lending
and how it benefits their business.
German marketplace
Sellers on the German marketplace access financing of up to €5m without leaving the seller portal, funded through Banxware.
Listen to the episode
B2B jewellery marketplace
The global jewellery trade marketplace finances its buyers at the point of purchase, under its own Buy Now, Grow Faster brand.
Listen to the episode
Hotel software
Hotels running the property management system can take £3k to £1m through YouLend, repaid as a share of revenue, to spend on refurbishment and upgrades.
Read the storyWhere to start
A three-part primer on what it takes to build a lending business in Europe, written with Nicolas Kipp, co-founder of Credibur.
Licensing
What authorisation you need, in which markets, and why a payments licence gets you further across borders than a lending one.
Funding structures
Where the capital comes from, what each structure costs, and which ones scale.
Operational infrastructure
What has to exist once money starts moving: servicing, collections, reporting, and the systems underneath.
Latest lending coverage
Everything we published on embedded lending, with the most recent pieces first.
Latest stories
Glovo brings PragmaCash to Romania, its second merchant lending programme REA Card brings YouLend financing to Germany's offline merchants JTL and YouLend bring embedded lending to German e-commerce merchants Otto Market Sellers Get Financing up to €5m Through Banxware Just Eat Takeaway.com and YouLend cross € 150m in restaurant financing See all lending coverageThinking about embedded lending?
Request your 30 minute slot with me to talk about your embedded lending plans. Free, no commitments, and everything we discuss stays between us.
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