It wasn’t long ago that small and medium-sized businesses (SMBs) had to go to a bank to obtain a loan or line of credit. With embedded finance, that has quickly changed. Business owners can access financing directly through platforms they’re already using, like payment processors or accounting software, transforming the lending experience for SMBs. 

What is Embedded Finance?

Embedded finance  weaves financial services features like payments, insurance, and lending into a non-financial platform. This is done through providers and APIs who work together on a specific platform. An example is e-commerce businesses using Stripe to process online payments. The result is a frictionless experience to access financial services without leaving the platform.  

New Lending Opportunities for SMBs 

SMBs no longer have to apply for a traditional small business loan and meet strict underwriting criteria from a bank to qualify for financing. With embedded finance capabilities, they can access tools to secure financing within the platforms they’re already using like Shopify Capital and QuickBooks Capital. 

Additionally, these tools use alternative data sets that go beyond an applicant’s creditworthiness, giving further access to capital. Their underwriting criteria can include sales numbers, cash flow, and revenue. 

Through embedded financing, many of the hurdles and hassles of processing payments or applying for a loan are gone. This makes it more appealing for business owners, who can simplify their transactions and get financing — all in one place.  

How Does Embedded Finance Increase Lending Opportunities to SMBs? 

Embedded finance increases access to lending opportunities for small and medium-sized businesses by removing many of the barriers they face trying to obtain traditional financing. Whether that’s due to credit, lengthy funding timelines, or a complicated loan application, those obstacles disappear with embedded finance. Here are some benefits of embedded finance for SMBs. 

Faster Access to Credit  

Business owners facing a cash crunch typically need capital fast. Trying to get a traditional loan typically isn’t very conducive to that. There may be a long application process, gathering of data and paperwork, and manual underwriting review.  

On the other hand, lending opportunities through embedded finance platforms such as accounting software and e-commerce platforms provide funds in as soon as one to two business days. This type of convenience and access makes embedded finance options appealing to SMBs, as it’s a solution to their problem and better than other lengthy alternatives.  

Streamlined Repayment  

Some embedded finance lending options have streamlined repayment for borrowers. For example, some e-commerce platforms offer automated and flexible payments based on a store’s sales. What makes it even more attractive to borrowers is that it may also allow them to make payments only when they’re selling and less when sales are sluggish.  

Improved Customer Experience  

Embedded finance options offer business owners an improved customer experience. Everything is streamlined and done through the platform they’re already using for their day-to-day operations.  

Application time is cut to a minimum as the platform has much of the data it needs to make a lending decision. Additionally, business owners don’t have to wait long to receive funds and can manage everything under the same roof.  

Personalized Lending Options

Business owners can get highly customized loan offers from platforms with embedded finance. Whether it’s through the e-commerce platform or accounting software, financing options are tailored specifically to the borrower based on real-time transactions and sales activity.  

How Biz2X Plays a Key Role in Embedded Finance

The future of financial services is ripe to be deeply intertwined with embedded finance, creating a shift towards an accessible, frictionless, and customer-centric financial ecosystem.  

According to Global Market Insights, the global embedded finance market size was valued at $104.8 billion in 2024 and is projected to grow rapidly in the coming years. The growth can be attributed to businesses and consumers wanting integrated payments within the services and platforms they’re already using. 

Biz2X is driving the technology behind embedded finance, simplifying the integration of financial services across diverse business ecosystems—from payments and accounting to healthcare, payroll, and invoicing. This seamless integration empowers partners to deliver customized financial solutions directly within their platforms, unlocking new revenue opportunities while boosting engagement and retention. By prioritizing end-user needs, businesses can provide customers with the right lending options at the right time, creating a frictionless and efficient embedded lending experience.