The challenge for neobanks
Neobanks and fintechs build user trust and engagement around core financial infrastructure — current accounts, cards, payments, savings. Business lending is the logical next product: it is what users ask for, and it unlocks significant revenue.
But offering business lending directly requires either a banking licence or an FCA credit broking authorisation and a balance-sheet funding arrangement. For most growth-stage fintechs, neither is immediately practical.
The alternative: embed lending through a regulated credit broker.
The credit broker route: no banking licence required
An NACFB-authorised credit broker can be integrated into a neobank’s product as an embedded lending partner. The neobank:
- Surfaces a lending product to users (within their app or web platform)
- Routes the application to the broker’s matching engine
- Earns revenue share on every funded deal
The broker handles FCA compliance, lender relationships, and credit decisions. The neobank provides distribution and user trust.
This requires only a distribution arrangement — not a banking licence or credit broking authorisation. Fundably is FCA authorised and NACFB registered. Partner platforms do not need their own FCA credit broking licence for the embedding activity, provided they are not advising on specific products.
Integration within a neobank product
The optimal neobank integration uses the REST API path with banking data pre-fill:
- Pre-qualification: the neobank’s transaction and account data is sent to Fundably’s API to assess indicative eligibility
- In-app prompt: users who meet eligibility criteria see a contextual offer (“You may be eligible for up to £75,000 in business funding”)
- In-app application: the user completes a short form within the app — pre-filled with known account data
- Matching and offers: Fundably matches across 50+ lenders and returns offers, displayed in-app
- Completion: user accepts an offer, lender funds directly to their account
The entire flow can be in-app. Users never leave the neobank product.
Revenue model
Neobanks earn up to 30% revenue share per funded deal — paid within 14 days of funding completing.
At 1% of monthly active SME users applying:
| Active SME users | 1% apply | 60% approved | Avg commission £2,000 | Monthly revenue |
|---|---|---|---|---|
| 10,000 | 100 | 60 | £2,000 | £120,000 |
| 50,000 | 500 | 300 | £2,000 | £600,000 |
| 200,000 | 2,000 | 1,200 | £2,000 | £2,400,000 |
These are illustrative figures assuming mid-range adoption. Banking data-powered pre-qualification typically drives higher application rates than cold prompts.
Regulatory considerations for neobanks
Neobanks that are already FCA regulated (e EMI, PI, or bank authorisation) operate within a defined regulatory perimeter. Embedding a credit broker’s application flow does not typically extend that perimeter — provided the neobank is not making credit recommendations or decisions.
Neobanks that want to go further — managing repayment directly, offering credit within their own ledger, or embedding lending under their own FCA credit licence — would need to extend their permissions or obtain credit broking authorisation.
Fundably’s compliance team can advise on structuring the arrangement correctly for your regulatory situation.