Embedded finance was meant to transform how small businesses access credit, bringing lending to the point of need, whether that’s within an accounting
platform, a business management tool, or a digital marketplace. In theory, it should create seamless, contextual experiences where funding is just a click away.
In practice, it often falls flat. For most SMEs, applying for a business loan through an embedded journey still feels surprisingly old-school: a static
form, a phone call and a long wait.
Click “Apply for a loan” on most platforms and you’re taken to a basic third-party form. There’s no real-time eligibility check, no instant offer and no
sense of whether it’s worth continuing. What follows is usually a delayed phone call asking for the same details already submitted. It breaks the flow of an otherwise digital journey, failing both the business and the platform.
The ripple effects go far beyond abandoned applications. When small businesses can’t access timely, transparent credit, it holds back investment, limits
job creation and slows productivity. In a climate where SMEs are expected to drive recovery and growth, inefficient lending journeys are more than a missed opportunity, they’re a drag on the wider economy.
The Problem with Embedded Lending Today
The real missed opportunity lies in the fact that these journeys start in data-rich environments. Whether it’s an accounting app, a marketplace dashboard,
or a POS system, the platform often holds financial and transactional data that could power instant pre-qualification, eligibility insights or even tailored offers. Instead, this context is left untapped and SMEs are pushed into a generic, one-size-fits-all
application flow.
For small businesses, especially those without a CFO, this creates friction at the very moment they’re ready to engage. They don’t just want a form; they
want clarity, speed and confidence that the process is worth their time. Without it, many simply abandon the journey or seek out direct lenders who can give them immediate answers, often at the expense of finding the best possible terms.
The Case for Automation-First Brokers
Forward-thinking brokers are redefining commercial finance by embracing open banking, machine learning and API-led lender integrations. Key data is pulled
instantly from sources like Companies House, credit bureaus and open banking feeds. Eligibility checks happen automatically and offers are matched and ranked in real time.
But this shift is not just about speed, although the time savings are substantial. It is about transforming how small businesses experience credit. Instead
of submitting an application and hoping for the best, customers are shown tailored, pre-qualified offers right from the start. Transparency builds trust. Simplicity drives conversion. As a result, businesses are far more likely to secure the right funding
quickly and with confidence.
Serving the Underserved Profitably
We all know SME funding needs fixing and there’s a compelling reason to act.
CMRC
estimates the
funding gap to be nearly £12bn. Many of the businesses that seek finance through embedded journeys are the ones most underserved by traditional channels, those who don’t have the experience
or network to access or assess finance options.
More importantly, these are the businesses that benefit most from improved guidance and transparency. Many don’t have prior borrowing experience. Some
have been misled in the past or denied access to credit due to a thin file or inconsistent income.
Often these businesses are seeking loans under £25,000, the segment traditional brokers are least incentivised to support – low-value applications are
usually deprioritised due to their limited commission potential. But with automation, the economics change. The cost to process small-ticket loans drops dramatically, making it commercially viable to serve a previously overlooked, yet vital, market.
Embedded lending solutions provide them access within their day to day tools, tools they are familiar with and trust. That is an important first step but
they don’t just need access, they need clarity, education and a sense of control. A static form followed by a sales call doesn’t cut it the way that an embedded journey which delivers immediate outcomes does.
Why Platforms Should Care more
This isn’t just a win for brokers. It’s an opportunity for lending platforms to improve their offering and it’s an opportunity for other platforms to add
a lending arm without the hassle of building from scratch.
When platforms embed finance properly, with real-time decisioning and transparent offers, they do more than monetise traffic. They create a stickier product,
a better customer experience and a reason for SMEs to stay engaged and come back.
Imagine a world where a business user logs into their procurement software or payments dashboard and is immediately presented with a working capital loan
offer tailored to their transaction history. The user logs into their procurement software or payments dashboard and sees an instant offer for a working capital loan based on their recent transaction history, one that’s actually pre-approved, not just a lead
magnet – they’re far more likely to explore it.
If the application process is fast, fair and conclusive, businesses will remember the experience and associate it with the platform that enabled it. When
actionable suggestions lead to positive outcomes, trust is built. In other words, embedded lending isn’t just a feature, it’s a retention lever.
Embedded Lending 2.0
The next wave of embedded lending won’t be about embedded journeys. It will be about embedding outcomes.
The market is overdue for reform and platforms must rethink who they partner with, because legacy processes simply won’t deliver the outcomes today’s customers
expect. To lead in financial services, platforms need partners who can enable embedded journeys with:
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Instant eligibility feedback
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Real-rate, pre-qualified offers
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API-based lender integrations
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Automated document collection
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Optional human support (when needed)
These aren’t future ambitions, this is already happening. Brokers serious about automation are helping platforms move beyond static forms and into embedded
journeys that truly deliver on the promise of embedded finance.
The Role of Smart Matching
At the heart of this transformation is intelligent matching: using real-time data and behavioural analysis to recommend the right product, from the right
lender, at the right time. This requires more than a decision tree. It demands a broker engine that integrates lender policies, credit bureau insights, transaction data and sector nuances to present the business with genuinely viable options.
Increasingly, these matching engines are powered by machine learning algorithms – not just to process inputs faster, but to continuously learn from loan
outcomes and applicant behaviour, refining recommendations and lender fit with every interaction.
It also means surfacing blockers early. If a business is unlikely to qualify for a loan, it’s better to identify this upfront and suggest a different product
or timeline. The best digital brokers are increasingly doing just that, giving businesses the information they need to make informed decisions rather than just pushing them through the funnel.
A Better Experience for All
Ultimately, this is not just a question of broker efficiency, platform engagement, or conversion rates. It is about reimagining the lending experience
so that, from the very first click, a business feels supported, understood and respected. An experience that recognises the value of their time, acknowledges their expertise and offers a clear path forward not a maze of repetitive steps and delayed answers.
When we replace static forms with genuine, data-driven outputs, the benefits compound. Platforms strengthen their role as trusted partners in their customers’
growth, deepening loyalty and lifetime value. Brokers streamline their processes, enabling them to serve more businesses with greater precision. And most importantly, SMEs gain the clarity and capital they need at the moment they need it so that ambition is
not lost to friction.
Embedded lending has the potential to be more than a technical integration; it can be an enabler of economic momentum. The bar must rise. Let’s not settle
for embedding forms. Let’s embed possibility.
