The three embedded lending revenue models
When a platform embeds lending into its product, it earns money through one of three structures — or a combination:
1. Revenue share (broker/arranger model)
The platform partners with a regulated credit broker. When a user is funded, the broker earns an arrangement fee from the lender. The platform receives a percentage of that fee.
How it works:
- User applies via the embedded integration
- Broker matches user to lender; lender funds the deal
- Lender pays broker an arrangement fee (typically 3–8% of loan amount)
- Broker pays platform up to 30% of that fee
Example calculation (£100k term loan, 5% arrangement fee):
- Arrangement fee: £5,000
- Platform’s 30% revenue share: £1,500
Characteristics:
- No balance-sheet risk for the platform
- No regulatory overhead (broker handles FCA compliance)
- Higher commission rate relative to loan amount vs NIM model
- Best for: most B2B SaaS, marketplace, and platform types
Fundably’s commission: up to 30% revenue share per funded deal. Zero setup fees, zero monthly costs.
2. Net interest margin share (balance-sheet lender model)
The platform partners directly with a balance-sheet lender (e.g. YouLend, Liberis). The lender funds deals from their own capital. The platform receives a percentage of interest income.
How it works:
- User applies via the embedded integration
- Lender makes a credit decision and funds from their balance sheet
- Platform earns a percentage of interest paid over the life of the loan
Example calculation (£50k MCA, 1.3× factor rate = £65k repayment):
- Total interest/factor charge: £15,000
- Platform’s 15% share: £2,250
Characteristics:
- Single lender = lower approval rates
- Revenue spread over the term of the loan (not paid on completion)
- Lender takes on credit risk; platform takes on concentration risk (one lender declining a large proportion of users)
- Best for: payment platforms with strong card-transaction data feeding MCA underwriting
3. Referral fee (per-introduction model)
The simplest structure: a fixed fee per customer introduced who goes on to be funded.
Characteristics:
- Simple to understand and track
- Less common for embedded integrations (more common for affiliate programmes)
- Fee is typically smaller than revenue share on large deals
Hybrid models
Some arrangements combine elements of the above. For example: a base referral fee per funded deal, plus a revenue share on deals above a certain size. These are typically negotiated for high-volume platform partners.
Which model is best for my platform?
| Your situation | Recommended model |
|---|---|
| B2B SaaS, mixed user base | Revenue share (broker model) |
| Payment platform, card-taking merchants | Consider NIM share (lender model) |
| Low-volume discovery phase | Referral fee |
| High volume, sophisticated platform | Revenue share or hybrid |
For most platforms, the revenue share model via a credit broker (Fundably) delivers the highest return per funded deal across a mixed business user base — because multi-lender matching drives higher approval rates.
Key commercial considerations
Volume and tier: some brokers offer improved commission rates for high-volume partners. Fundably starts every partner at up to 30% — there is no volume requirement to unlock the maximum rate.
Payment timing: revenue share from a broker is typically paid within 14 days of funding completing (one transaction, one payment). NIM share from a balance-sheet lender may be spread over the loan term or paid monthly.
Minimum volumes: broker models typically have no minimum volumes. Balance-sheet lender arrangements may include minimum introduction requirements.
Exclusivity: most broker-model arrangements are non-exclusive. You can run multiple embedded partners simultaneously if you choose to.