Innovative Lending Platforms

#fintech has revolutionized #lending not only via the what (access), but also via the how (process) and platforms have played a big role. Let’s take a look. Lending done the traditional way is balance sheet-based and implies a direct relationship. However, limitations such as complex underwriting, bureaucratic processes, inflexibility and a lack of customization have long made the case for alternatives. The rise of platforms has changed everything. China’s SuperApps have led the way and although the authorities have over the past years cracked down on the model, it’s worth having a look. Ant Financial’s lending arm – called Credittech – contributed at its peak in 2020 almost 40% of Ant’s revenues. The model ran on minimal credit-risk taking with 98% of lending either securitized or underwritten by (100) partner banks. Credittech consisted of 3 business lines: 1. Huabei (translated Spend) — Small-ticket consumer credit aimed at daily expenses — Launched in 2014 as a virtual credit card — Main target group: young Chinese with consumption potential but limited credit history — Instant credit underwriting based on platform data — In essence, a Chinese BNPL version with two variations: 1) an interest-free option for up to 40 days repayment after purchase 2) monthly instalments between 3 and 12 months 2. Jiebei (translated Borrow) — Launched one year after Huabei (2015), targeting larger tickets — Short-term, consumer unsecured lending — Requirement for previous credit history with either Huabei or the Ant platform — Instant credit underwriting and disbursement to the customers’ Alipay account (or to connected cards) — Repayment via 3-12 month installments 3. Mybank (MY is short for mayi, which translates as Ant): — An Ant Financial digital only bank targeting small businesses — Focus on servicing large volumes of small-ticket loans via #technology: big data, automation, standardization, and Artificial Intelligence (AI) — Data-driven underwriting (assessment of more than 3,000 variables) — Due to the lack of credit history #data or collateral the bulk of the credit decision is made based on repayment data from e-commerce platforms, online customer profiles, smartphone payments and other available records (local government, insurance) — 3-1-0 lending model: borrowers can complete their online loan application in 3 minutes, obtain approval in 1 second, with 0 human interactions. — Profitable business model via high-approval rates, low defaults rates (∼1%) and lower operational costs — In 2020 MYbank accounted for 50% of the SME market in China, with 78% being first-time borrowers and 40% female-run SMEs. Technology, the abundance of data, access to both sellers and buyers and market size and leverage, make platform models uniquely positioned to cut the lending Gordian Knot. Opinions: my own, Graphic sources: World Bank, Economist Intelligence Unit, BFA Global LP

The current housing finance system was built to serve a singular model of homeownership: the primary residence, the daily commute, and a primary occupant and a married, employed borrower. But many work remotely, travel more often, get married later, or not at all, have multiple income sources and extended families. We need to remodel homeownership and home finance for the modern life! I have dedicated much of my career to building innovative lending solutions for a new and better future of homeownership. The new model is one that is built for how we want to live and own today. It is home finance constructed with lending options for buyers who buy with friends, family or just to share their home with others. It is for modern sellers who might want to equity share with investors, get a down payment gift from their boomer parents, or add an ADU or a roommate for extra income. It is for those brave souls who urn for a fixer upper; or those entrepreneurs who want to live alongside where they work; for freelancers, consultants and other gig economy workers, who just need a tiny space to call home. Innovative lending for today's modern buyer focuses on flexibility, personalization, and convenience. We need to overhaul archaic underwriting guidelines and replace them with solutions designed to meet the diverse needs of buyers offering unique products like: 1. Shared Equity Agreements (HEI) instead of traditional down payments, so that buyers can partner with investors, parents, friends and family, sharing future equity in exchange for upfront funds, reducing the initial down payment burden 2. Income-Sensitive Lending - tailor loans for all of us with unique income sources (rental income, roommate income, second home, second job, gifts) and use alternative data to access creditworthiness, expanding access to homeownership. 3. Offer streamlined processes that enable quick pre-approval, digital document submission, OCR of bank statements, and real-time updates making the experience faster, more transparent. Give the client more control. 4. Green Mortgages that offer rewards for investing in energy-efficient homes, or renovations, aligning with sustainable goals. 5. Remove the label of NonQM - no body wants a non quality mortgage. And while we are at it, make interest only loans, HELOCs and other Hybrid Adjustable-Rate Mortgages (ARMs) quality again. These loans offer low initial rates with flexible adjustment periods, giving buyers the chance to manage their payments as they grow financially. 6. Access to home equity, and folks have a pile of it, needs to evolve significantly, offering clients more flexible ways to leverage the value built up in their property. HELOCs, HEIs, Cash-out refinancing, Reverse Mortgages, Fractional Home Equity Sharing provide homeowners with diverse options to access their equity, while offering more control over how and when they tap into their home's value. Home finance built for the modern buyer!

Many B2B SaaS companies are overlooking a $23B opportunity right under their noses. Vertical and horizontal SaaS platforms serving businesses are sitting on a goldmine of customer financial data. Embedded lending is set to explode from $6.35B to $23.31B by 2031, and B2B SaaS firms have the inside track. They have what traditional lenders don't: deep, ongoing visibility into their customers' financial health and operations. Canopy, a Foundation Capital portfolio company, enables B2B SaaS platforms to launch embedded lending products that serve customers precisely when they need it most. The benefits are: → New revenue streams from interest income → Stronger customer relationships and retention → Higher customer lifetime value Some examples: Flexport offers cash advances on commercial invoices, helping customers cover shipping costs before getting paid. Toast provides working capital loans to restaurants, leveraging transaction data to assess risk. And ServiceTitan enables contractors to offer financing to homeowners, increasing job close rates by 39%. B2B SaaS companies that aren't exploring embedded lending are leaving money on the table. Thoughts?

The merchant cash advance market is undergoing the same technological transformation that revolutionized traditional lending, but faster and with more dramatic efficiency gains. On August 4, 2025, Julie Muhn at the Finovate Blog reported that website builder Wix launched Wix Capital as part of a new financial services suite integrated into its platform. Real-time bank connectivity eliminates the monthly financial statement delays that plague traditional credit. Automated underwriting processes sales data in minutes, not weeks. Daily repayment tracking provides continuous portfolio performance visibility. This technology stack creates institutional-grade transparency that was not possible five years ago: Underwriting Speed: Decisions in hours based on live transaction data Portfolio Monitoring: Real-time cash flow tracking across thousands of advances Risk Assessment: Pattern recognition across merchant categories and geographic markets Operational Efficiency: Minimal human intervention from origination to repayment Wix Payments Co-Heads Amit Sagiv and Volodymyr Tsukur say the solution is fast, simple, and designed to help small businesses access their money and fuel growth in one place. For institutional investors, these innovations solve the traditional MCA challenges of opacity and operational complexity. More importantly, MCA platforms now analyze forward-looking sales trends, seasonal patterns, and market dynamics rather than relying solely on backward-looking financial statements. Platforms that blend traditional credit discipline with MCA innovation are attracting significant institutional capital because they offer both yield and analytical sophistication. Early institutional adopters continue to capture premium returns while these technological advantages remain concentrated among a small number of sophisticated players. How is technology changing your approach to alternative credit investments? #Fintech #CapitalMarkets #CreditTechnology #AlternativeInvestments #DataAnalytics Source in comments 👇

🚨 𝐓𝐡𝐞 𝐑𝐢𝐬𝐞 𝐨𝐟 𝐄𝐦𝐛𝐞𝐝𝐝𝐞𝐝 𝐋𝐞𝐧𝐝𝐢𝐧𝐠 𝐢𝐧 𝐋𝐀𝐓𝐀𝐌 — 𝐛𝐲 Getnet 👇 As SMEs across Latin America push toward digitalization, one challenge remains constant: access to credit. Traditional lending models often fail to support the needs of micro, small, and medium-sized businesses. Embedded lending is closing that gap — 🌐 𝐓𝐡𝐞 𝐋𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞 ► In LATAM, over 90% of companies are SMEs — yet only a small fraction receive formal financing ► Digital platforms are now embedding credit into their ecosystems, offering contextual, data-driven lending solutions with seamless user experiences. — 👀 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐄𝐦𝐛𝐞𝐝𝐝𝐞𝐝 𝐋𝐞𝐧𝐝𝐢𝐧𝐠? ► Embedded lending allows businesses to offer credit directly within their own platforms — whether e-commerce, SaaS, acquirers, or marketplaces ► Rather than redirecting to a traditional bank, credit is issued in real-time at the point of need — backed by alternative data and simplified KYC processes — 🔍 𝐓𝐫𝐚𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐋𝐞𝐧𝐝𝐢𝐧𝐠 𝐯𝐬. 𝐌𝐨𝐝𝐞𝐫𝐧 𝐋𝐞𝐧𝐝𝐢𝐧𝐠 Traditional Lending: → Paper-heavy onboarding → Fixed approval logic → Long disbursement cycles → One-size-fits-all financing ⤵️ Modern Lending Models: → BNPL (Buy Now, Pay Later) Short-term installment credit offered at the point of sale — often with zero interest — allowing SMEs to access necessary goods/services while smoothing cash flow → Invoice Factoring SMEs sell their outstanding invoices to lenders for immediate cash — unlocking working capital without taking on new debt → Merchant Cash Advances Financing based on a merchant’s projected credit card sales or daily revenue, typically repaid via a percentage of future transactions → Recurring Revenue Lending Tailored for SaaS companies and subscription-based businesses, this model lends against predictable monthly recurring revenue (MRR) → API-Based Embedded Lending Fully digital, contextual lending offered directly within a platform’s interface. Credit terms are calculated based on real-time behavioral and transactional data, and loans are issued instantly These new models reflect a fundamental shift: from rigid credit products to embedded, data-driven financing that meets SMEs where they operate — 📈 𝐓𝐡𝐞 𝐄𝐯𝐨𝐥𝐮𝐭𝐢𝐨𝐧 𝐢𝐧 𝐋𝐀𝐓𝐀𝐌 ► Embedded lending is projected to grow 5x in Latin America over the next 3 years, as platforms integrate financing tools into their core offerings ► By embedding credit at checkout or payout, platforms like Getnet are enabling merchants to access capital tied to their revenue and transaction data ► This is not just fintech innovation — it’s ecosystem transformation, unlocking working capital for millions of businesses across the region Embedded lending isn’t just a trend — it’s the next infrastructure layer for LATAM’s digital commerce economy — Source: Getnet ► Subscribe to 𝐓𝐡𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐁𝐫𝐞𝐰𝐬 ☕: https://lnkd.in/g5cDhnjC ► Connecting the dots in payments... | Marcel van Oost

Lending-as-a-Service: Open API-based Digital Lending 💡 Lending-as-a-Service (LaaS) allows businesses to offer credit products and services to their customers in conjunction with established lenders through open APIs. LaaS can be embedded by virtually any vendor in the digital ecosystem, allowing businesses to provide a one-stop shopping experience to their customers. In markets where digital adoption is prevalent, LaaS could be an increasingly important source of competitive advantage and ancillary revenues for vendors. For digital lenders, LaaS is a rapidly growing channel of loan distribution, with a host of benefits 🎯 The embedded loan platform could be in the form of: 🔹 Digital loan application API and front-end 🔹 eKYC/eKYB API 🔹 Alternative data API for Loan applicant assessment 🔹 Loan Scoring services 🔹 Loan administration module However, product and service quality levels on the market vary widely, and digital lenders should exercise caution when they select a technology partner. An API-powered credit analytics framework may measurably enhance a digital lender’s risk management capabilities, which may in turn enable innovative funding solutions that are traditionally reserved for large financial institutions or corporations. An example is the securitization of small business trade receivables. Imagine a group of small businesses that supply their goods and services to their customers (debtors) with payment terms ranging from 30-90 days. This creates a working capital need for the sellers, which can be financed through digital loans, with the underwriting process capturing vital real-time credit data on the borrowers as well as debtors ⏱ The lender could obtain funding from capital markets through a special-purpose vehicle (SPV) which houses the portfolio of receivables, circumventing the need to raise funding through conventional channels that may be more costly and restrictive. The technology involved throughout the structure can be managed by a qualified external service provider. Source: Brankas - https://t.ly/DBAYx #Fintech #Banking #OpenBanking #EmbeddedFinance #API #FinancialServices #Payments #Lending #Loans #BNPL #Scoring #KYC #SaaS

Just how are payment solutions offering working capital to B2B buyers and suppliers? As a follow up to my post last week, let’s dig in on the various offerings in the market today. There has been an explosion of fintech lending because large banks and community banks often underserve SMBs due to high onboarding friction and risk adverse underwriting (See data in the comments). 💳 Payment Processors (e.g., Stripe, Square, PayPal) Target: Mostly sellers, especially SMBs and micro-merchants Products Offered: ☑️ Instant Payouts (within minutes) ☑️ Merchant Cash Advances (MCAs) ☑️ Working Capital Loans (via partners or balance sheet) Typical Loan Size: ☑️ $500 to $250,000 ☑️ Repayment often tied to % of daily sales Cost Structure: ☑️ Flat fees or fixed % (6%–15%++) ☑️ Instant payouts: 1.5%–1.75% per transaction Risk Profile: ☑️ Medium-high—based on sales volatility and limited financial history. ☑️ Automated underwriting minimizes cost but increases exposure. Market Growth: ☑️ High—massive growth driven by embedded finance and cash flow demand from digital SMBs. 🧾 AP Automation / Procurement Platforms (e.g., Coupa, Tipalti, Ariba/Taulia) Target: Primarily buyers, with optional supplier participation Products Offered: ☑️ Dynamic Discounting (self-funded) ☑️ Supply Chain Finance (bank/fintech-funded) ☑️ Invoice approval + embedded lending Typical Loan Size: ☑️ Buyer-funded discounting: unlimited (cash on balance sheet) ☑️ Supply Chain Financing via partner: $250K–$5M+ depending on buyer size Cost Structure: ☑️ Discount rate on early payment (1%–3% typical) ☑️ Often rev share with funding partners Risk Profile: ☑️ Low for platforms (not balance sheet lenders) ☑️ Buyer risk if self-funded; financier risk otherwise Market Growth: ☑️ Accelerating, especially as treasury teams get pressure to optimize cash yield and procurement teams seek smoother, more reliable supplier relationships 🧩 Vertical SaaS & Marketplaces (e.g., Shopify Capital, Toast Capital, Faire, Mindbody) Target: Generally sellers, though some also extend buyer credit. Products Offered: ☑️ Embedded BNPL for B2B ☑️ Invoice Factoring ☑️ Revenue-Based Financing Typical Loan Size: ☑️ $5K–$500K ☑️ Often underwritten using real-time platform activity Cost: ☑️ Flat fees, take rates, or tiered rates (~8%–20%+ depending on model and term) Risk Profile: ☑️ High volatility but offset by strong real-time data signals ☑️ Tends to outperform traditional SMB lending in default predictability Market Growth: ☑️ Explosive—driven by embedded finance in vertical SaaS. ☑️ Lower CAC due to captive customer base. Software platforms don’t have to build these capabilities themselves, nor do they need to extend funding from their own balance sheet. As with embedding payments, there are partners that SaaS can rely on to get started, such as Pipe, Kanmon, OatFi and, of course, Stripe Embedded Finance and Adyen Capital. Shout out to Michael Barbosa, Luke Voiles, and Jon Lear

Most of the digital asset conversation these days centers around payments infrastructure and stablecoins. But what if we shifted the focus to credit? On the latest episode of LoanPro’s Lenders on Lenders, I had the chance to chat with Colton Pond and Mike Taormina, CFA about a really compelling question: 👉 What if lenders could grow originations and reduce net losses—by using digital assets as collateral? Vault is doing just that. Their model enables borrowers to access better credit terms using assets they already own, while giving lenders a way to mitigate risk and expand access. We covered: ▶️ Why this approach is different from DeFi lending protocols ▶️ What a new wave of regulation means for innovation ▶️ Digital asset ownership trends ▶️ And what it takes to build something truly novel in lending It was a fascinating convo, and a great reminder that some of the most exciting innovation in crypto is happening outside the usual headlines. 🎧 Give it a listen here! https://lnkd.in/gsJnep2T

What's driving the shift from consumer to business lending in Latin America? Let's break it down. After analyzing the lending landscape across the region, a clear pattern emerges. While the first wave of innovation focused heavily on consumer credit - particularly BNPL solutions that capitalized on PIX adoption - the real innovation is now happening in B2B credit. The evolution tells a fascinating story. Companies like Kovi and Mottu proved that specialized lending platforms targeting the gig economy could achieve rapid scale. Kovi's success in building an all-inclusive car subscription model has inspired similar innovations across the region, demonstrating how lending can be reimagined for specific use cases. But the most compelling opportunity lies in B2B credit infrastructure. Companies like R2 in Mexico and Dinie in Brazil aren't just lending money - they're building the rails that allow any business to become a lender. This "lending-as-a-service" approach leverages existing business relationships and data to make better credit decisions. Looking ahead to 2025, three spaces stand out: First, specialized lending platforms combining industry-specific tools with financing (think Solfácil in renewable energy and Capim in healthcare). Second, embedded finance platforms turning software companies into fintech lenders, with R2's partnerships with Rappi and Clip leading the way. Third, infrastructure providers facilitating cross-border lending, where Mundi and Finkargo are just scratching the surface of the trade finance opportunity. The next Latin American fintech unicorn won't just be another lending platform – it will be a company that fundamentally changes how businesses access and distribute credit across the region. I dive deeper into this evolution and share specific predictions in my latest article. What B2B lending opportunities do you see emerging in Latin America? #FinTech #LatAm #VentureCapital #Innovation

𝐈𝐬 𝐩𝐞𝐞𝐫-𝐭𝐨-𝐩𝐞𝐞𝐫 𝐥𝐞𝐧𝐝𝐢𝐧𝐠 𝐚 𝐭𝐫𝐚𝐩? Or a startup game-changer? Raising capital is tough. Banks say no or drown you in infinite paperwork. Investors take too long. VCs want a big slice of your company. But what if you could borrow money directly from individuals—no middlemen, no equity loss? 👉 That’s peer-to-peer (P2P) lending. A growing number of founders are skipping traditional financing and turning to platforms where everyday investors fund their businesses. How it works? ↳ You apply on a P2P platform, set your loan terms, and investors decide whether to fund you. It’s like crowdfunding, but for loans. Why founders love it? ✅ Faster access to capital – no months-long negotiations,  just a profile, a pitch, and a loan. ✅ Flexible interest rates – some founders secure single-digit rates, depending on creditworthiness. ✅ No equity dilution – unlike VC money, you keep full ownership of your company,  just repayments. ⚠️ The risks you should know: ❌ Credit checks still matter – a low credit score? Expect higher interest rates. ❌ Platform reputation is key – some are rock-solid. Others… not so much. ❌ Default risks are real – if you can’t repay, things can get ugly: legal actions, credit damage, and platform bans. With more startups seeking alternative financing, P2P lending is becoming a serious option. Have you tried it , or are you planning to? ---------------------------------------- 📢 Stay ahead in fundraising, entrepreneurship, and VC strategies! Follow Leon Eisen, PhD for actionable insights, tips, and expert guidance.