Five reasons why more B2B companies should offer business loans

With embedded finance, non-financial companies, such as platforms, marketplaces, SaaS providers or other B2B services can easily integrate financing and offer it directly to customers, a strategy with several business benefits. Here are five reasons to include it in your service portfolio.

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Starting a financing business for small businesses is not something you do overnight. It requires infrastructure, licenses and capital, among many other things. But thanks to embedded finance, non-financial companies, such as platforms, marketplaces, SaaS providers or other B2B services can integrate financing solutions and offer them directly to their customers. Offering financing to your customers means a number of benefits for your company – here are five reasons why you should include it in your service portfolio.

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Your customers need it

It's no secret that access to financing is a major challenge for most small businesses – and has been for a long time. In Europe alone, the financing gap amounts to 400 billion euros, and globally it is in the trillions. This means your small business customers likely have difficulty accessing financing when they need it – something you can help them with. But it's not just about offering a solution to those actively seeking financing. You also open up opportunities for customers who may not be looking for capital right now but may feel more secure knowing they have access to financing if needed. This can give them the opportunity to make investments and ventures they previously refrained from because they didn't think they could finance them. Additionally, it makes it easier for them to manage their cash flow in a flexible way.

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An extra source of income

The most obvious reason to integrate financing is that it gives you an extra source of income – without requiring any major effort or investment on your part. With Embedded, you can integrate our white-label solutions for SME lending into your existing platform in just a few hours of development time. Once it's implemented, you only need to guide your customers to use the service to start generating revenue. You don't need to handle operational aspects, financing, or credit risk – the platform handles everything. In practice, embedded SME financing means you can add a service that manages itself and generates revenue without any risk to your company.

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It increases customer loyalty

Financing isn't just about revenue. Another reason to include it in your offering is that your customers will see you as an enabler of their success because you're helping them solve one of their biggest problems. This, in turn, can lead to even greater profits than the revenue from lending itself. When your customers become more satisfied, they also become more loyal – which improves your NPS score. It creates a positive growth spiral where your customers do more business with you while becoming ambassadors for your brand.

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Customers stay longer

It's not just the customers who become brand ambassadors who stay longer – the average customer does too. Firstly, you get a "lock-in effect" on customers with active loans, as it becomes more difficult for them to switch suppliers during the repayment period. But above all, financing makes your overall offering more attractive. You gain a competitive advantage by offering a service that creates concrete value for your customers. Since access to financing is limited for small businesses, many customers will hesitate to stop using your service – as it would also mean they lose the opportunity to get financing if needed. This helps to lower your churn rate.

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Potential to grow your core business

Interest income, increased loyalty, and reduced customer turnover are direct effects of lending – but in the long term, there are even greater gains. Financing makes it possible for your customers to invest and grow their businesses, which means they will also increase their business with you. In addition to the short-term effects of embedded lending, you can also look forward to long-term growth in your core business by giving your customers the tools they need to succeed.

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Small businesses need financing – and by integrating lending into your offering, you can help them gain access to it while strengthening your own business. With Embedded, you can easily add a lending solution that is specifically developed for the SME segment and seamlessly integrate it into your existing platform, under your own brand. With an application process that takes just a few minutes, automatic data collection, credit assessment, and direct loan disbursement, you can offer your customers an unparalleled financing experience – while creating added value for both you and them.

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Book a demo today to see how embedded lending can help you grow your business.

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