The future of capital delivery: Specialized credit marketplaces connecting lenders and fintechs to qualified SMBs

Highly qualified, high-intent SMB applicants, efficient underwriting, better approval rates, and enhanced customer satisfaction levels — through Lendflow’s specialized embedded credit marketplace, lenders and fintechs break through to qualified, niche SMBs in a whole new way.

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By 
Jon Fry
 | 
 | 
July 20, 2022

In a recessionary environment, the pressure to acquire more qualified borrowers only mounts — higher interest rates leave lenders with increased costs of capital and smaller profit margins. To make matters worse, borrowers keep growing more desperate for working capital, increasing the prevalence of credit fraud.

With liquidity drying up across Wall Street and Silicon Valley, qualified SMBs, now face an urgent need to find lenders that specialize in their same industry — the kind of lenders who actually understand their business and can meet their specific credit needs in a more efficient and timely manner, given a backdrop of broader economic uncertainty. To access fast capital and stay afloat during market volatility, viable SMBs will increasingly turn to fintechs and alternative lenders that are uniquely equipped to help them weather the storm.

A specialized embedded credit marketplace — where qualified borrowers can be matched with lenders that specialize in their same industry — solves this long-standing problem and opens up new growth possibilities for forward-looking lenders and fintechs, alike.

How Lendflow’s specialized embedded credit marketplace drives value.

Fintechs and alternative lenders are best positioned to serve the needs of SMBs that operate within their same industry. Given their operational expertise, proven know-how, and cultivated trust, through one simple solution, these companies can emerge as lifelines for underserved SMBs looking to have their particular capital needs satisfied.

Lendflow’s credit marketplace brings together specialized lenders looking to reach more SMBs on one side and qualified, high-intent SMBs looking to access capital on the other. 

SaaS companies simply embed Lendflow’s credit application widget into their existing product experience to open up new pathways to capital for their SMB customers. Through the embedded widget, SMB customers can apply for various capital products — think Lines of Credit, Term Loans, Receivables Purchase, Invoice Factoring, Equipment Financing, and more.

The quality and intent of SMB borrowers are the biggest differences between Lendflow’s embedded credit marketplace and all other lending marketplaces. SMBs that are already using credible SaaS products to run their operations, payroll, accounting, etc., are more likely to pass the qualification and underwriting requirements for a capital product. 

For vertical SaaS companies with a large audience of industry-specific SMB customers, joining Lendflow’s embedded credit marketplace represents a prime opportunity to gain a competitive edge, drive retention, and boost brand value with low lift — becoming a one-stop-shop for all, not some, of their SMB customers’ capital needs.

Lenders and Fintechs offering credit products, at the same time, smell a growth opportunity — by joining Lendflow’s marketplace, they can tap into this pool of qualified SMB borrowers with specific needs that may have once fallen through the cracks. 

Better yet, by pairing a robust specialized marketplace with Lendflow’s advanced Credit Decisioning Engine, lenders can more effectively fight fraud, automate processes, and optimize underwriting efficiency to approve new SMB customers faster. 

Bottom-line? Lenders gain greater market share by reaching qualified SMB applicants within Lendflow’s marketplace without taking on more risk or operational burden and can leap forward into the future of tech-friendly, point-of-need capital delivery.

Different industries, different capital needs

Before you can engage worthy borrowers, it’s important to first understand the marketplace you’re joining — and the customers it caters to.

Lendflow partners with a variety of Vertical SaaS companies that bring a variety of SMBs into the marketplace across a range of industries that have specific funding needs, including:

  • Construction — Without easy access to capital, SMBs operating across the construction industry are stuck at an impasse. Tailored solutions like invoice factoring and equipment financing empower SMBs in construction to take on more projects, source raw materials, purchase new machinery, smooth out fluctuating cash flows, and overcome ongoing inflationary headwinds.
  • Trucking & Transportation —  Continued supply chain chaos places capital at a premium for SMBs looking to grow their fleet, purchase equipment, or invest in routine maintenance and repairs. 
  • B2B Marketplaces — Whether it’s investing in marketing or recruitment initiatives, fortifying online capabilities, or scaling both sides of the marketplace, frictionless capital —  in the form of E-Commerce loans — remains the lifeblood for many B2B marketplaces.
  • Home services — Across the home services industry, SMBs depend on lines of credit to purchase supplies, maintain overhead, finance payroll, and acquire new customers. Without access to point-of-need capital, many of these SMBs struggle to survive as the cost of goods continues to soar.
  • Accounting/Finance/Fintech — SMBs in accounting, finance, and fintech often rely on revolving lines of credit for working capital. Whether it’s growing their staff, investing in marketing campaigns, or acquiring new customers, these SMBs undeniably put term loans, credit lines, and other E-Commerce loans to good use.
  • Cannabis — The still-blooming cannabis industry remains governed at a state level, with regulations varying by state. Traditional lenders and banks present significant barriers to entry because they are restricted from serving SMBs in the cannabis space. Specialized lenders, as a result, have emerged as the only solution for SMBs in this multi-billion-dollar industry to meet critical capital needs.
  • …and many more

Embedded marketplaces are the future of lending

Marketplace lending is growing in popularity — and for good reason. Higher approval rates and even higher levels of customer satisfaction, what’s not to like? 

Through a specialized embedded credit marketplace: 

  • Fintechs and lenders can gain new market share and reach more qualified borrowers operating across niche markets at much lower acquisition costs.
  • SaaS companies, meanwhile, can embed Lendflow’s product into their core experience and move the needle for SMB customers — extending beyond their core product offering to open up a new stream of revenue. 
  • SMBs benefit from seamless access to competitively priced capital solutions — meaning they now never have to leave your platform to meet their capital needs.

Lendflow’s embedded credit platform, and its specialized lender marketplace, have emerged as a strong growth driver for Fintechs, SaaS companies, and lenders because it breaks through to once underserved SMB industries with a smarter way of lending. If you’re curious about joining our embedded credit marketplace or learning more about what Lendflow can do for your business, let’s chat

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