The simple definition
Embedded lending is lending that is built into a non-financial product. Instead of a business owner going to a bank or a lender’s website to apply for a loan, they apply for funding within the software, platform, or marketplace they already use.
The loan comes from an external lender (or a matched lender from a panel). The platform is not providing the capital. It is providing the interface — and earning revenue share for doing so.
An everyday example
A small business owner uses accounting software to manage their books. At the end of the month, their software shows a cash flow forecast with a shortfall in three months.
Without embedded lending, the owner might:
- Recognise the funding gap
- Google “business loans UK”
- Apply to three or four lenders directly
- Wait weeks for decisions
With embedded lending inside the accounting software:
- The software flags the cash flow gap and displays a “Get funding” option
- The owner completes a short in-platform application (pre-filled with their accounting data)
- The platform matches them to appropriate lenders from a broker panel
- They receive offers within hours — without leaving the software
The accounting software earns a revenue share. The business gets funded faster. The lender gets a qualified applicant with verified financial data.
How embedded lending differs from a bank partnership
Traditional business banking partnerships (like Barclays’ Loan Referral Service) route declined customers to alternative lenders. The experience typically involves redirecting the user to a third-party website.
Embedded lending keeps the user inside the platform throughout the application — and matches them to multiple potential lenders rather than one. The key differences:
| Bank referral | Embedded lending | |
|---|---|---|
| User experience | Redirect to external site | In-platform, seamless |
| Lender options | Typically 1 | 1–50+ depending on model |
| Platform revenue | Commission on referred deals | Revenue share per funded deal |
| Platform control | Minimal | Full white-label |
| Time to go live | Months | Days (with iFrame integration) |
Who is doing this?
Embedded lending is already integrated into several major platforms:
- Accounting software (e.g. Xero with Funding Options; Sage with Liberis; QuickBooks with Funding Circle)
- Payment platforms (e.g. Shopify Capital, Square Loans, Stripe Capital — all single-lender models)
- Marketplaces (e.g. Amazon Lending — sellers can apply within Seller Central)
These are largely single-lender models, often using the platform’s own payment data as the underwriting input. The multi-lender model — matching across a 50+ panel — is newer and produces higher approval rates across a more diverse user base.
The revenue model for platforms
Platforms typically earn in one of two ways:
- Revenue share — a percentage of the arrangement fee or broker fee on each funded deal (the more common model for embedded broker integrations)
- Net interest margin share — a share of interest income (more common for platforms with balance-sheet lending partners)
For broker-model embedded lending (like Fundably), revenue share is up to 30% per funded deal. There are no setup fees or monthly costs.
Integration options
Modern embedded lending is typically available via:
- iFrame: zero-code integration; works in any platform regardless of tech stack
- React/web component: pre-built, brand-configurable component for React platforms
- REST API: full custom build with maximum UX control
With Fundably’s iFrame, a platform can go live in under 48 hours. See the full integration guide here.