What is Embedded Lending?

Embedded Lending is a hot topic in the fintech world right now. Traditionally you would visit your bank branch and talk to your regular contact person to apply for financing. Since the late 1990s, it became possible to apply for financing online, first through the website and then through the banking app. Embedded Lending goes one step further. Now it’s possible to apply for financing in the business tool on which you operate. So nowadays financing can be requested and received quickly, securely and easily from the place where you manage your business.

Automation of debtor management

Just as we as consumers are used to making a payment in an app at the touch of a button, Embedded Lending makes it possible to close financing in the software where entrepreneurs do their business.

Embedded Lending is the integration of financing into platforms and business tools. Entrepreneurs access financing on the platform or business tool they use to run their business. Generally, with Embedded Lending, the financing process is integrated into companies' platforms. For example, a financial services website or an accounting package. The use of data links allows the entire process to be integrated, allowing non-financial companies to act as a bridge between lending institutions and entrepreneurs.

This allows entrepreneurs to apply for funding from their business tool and see whether they qualify for funding within 1 minute. After the application is submitted, the money is often deposited in their account the next day.

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The benefits for entrepreneurs and business tools

The rise of Embedded Lending opens new doors and offers several benefits for both entrepreneurs and business tools.

For platforms, Embedded Lending offers new business opportunities. By integrating financing into their platform, they enrich their service offering. As many as 64% of SME’s say they need integrated financing! Both loyalty and sales increase. E-commerce companies even incrrease by 15-40%! Rapid technological developments now make it possible to offer integrated financing within 1 week, virtually without development costs!

For entrepreneurs, it means convenience and speed. They can now access financing directly within the familiar platform on which they do their business activities. This eliminates the need for them to open different apps or collect multiple documents for the funding application. The process is simple and integrated, leaving the full focus on their core business.

Because of this quick online process, an entrepreneur knows where he stands in 5 minutes and can continue to build his bol.com store.

The promising future of Embedded Lending in Europe

The Embedded Lending market is at the beginning of great growth. It solves problems that arose with the traditional financing process, but it does not stop there. The market continues to develop and more and more companies are taking advantage of it. The Embedded Lending market, specifically the B2B market, is at the beginning of major growth. According to a report by Innopay, the European Embedded Lending market will grow to €150 million by 2025. It will then grow significantly to more than €10 billion by 2030. In the global market, the future outlook is also very positive.