Embedded finance
Embedded finance

Getting financing to SMEs when and where they need it

With embedded finance options like revenue-based financing becoming more available, we expect more focus on SME at Money20/20.

Next gen banking and creating a better finance experience is high on the agenda at Europe's Money 20/20 event. One panel discussion that caught our eye is facilitating finance at the point of need.

We expected this to pop up and for SMEs to be the focal point… That’s because the SME audience is largely underserved, which leaves a huge gap in the finance ecosystem. But with embedded finance options like revenue-based financing, this all changes. Banks can better support SMEs.

And here lies the opportunity.

Why are SMEs so important?
With SMEs pinning up the UK economy for jobs and turnover it’s critical we find more ways to support small businesses with easily accessible funding. In fact, a recent study found that targeted support for SMEs could unlock £140bn of additional Gross Value Added (GVA) growth by 2030 – equivalent to creating ~3.2m new jobs across the UK.

Why embedded finance is a real force for change and how it has evolved

This panel on day 2 aims to focus on how embedded finance applications have evolved and how new business models are adapting to meet changing customer expectations and needs.

This is something we’ve recently looked into for the SME audience. Our research shows that there is a shift from banks being the most trusted finance provider for SMEs to them now looking to payment services and e-commerce platforms. In fact, 41% say their payment service provider is their most important business relationship - with banks ranking fourth, below website providers with 34% of votes. Throughout the research, flexibility and speed were cited as the most important factors when choosing a finance provider - basically, their business needs it to grow.

Essentially, quicker more agile solutions appeal to their needs. And so to attract their custom, you need to provide more accessible funding. We really hope the panel delves into this further.

This is our take on it…

The need for speed

Speed it the most important factor for SMEs when choosing a finance provider. In fact, almost half say so (43%). This enables them to cover the cost of materials/supplies, staffing and sales and marketing.

One of the most valuable aspects of YouLend for our partners is that their business customers can access funding in hours, not weeks - all thanks to the right tech to make quick lending decisions and deliver them straight to the SME.

Whilst supporting funds at a time of need, you don’t compromise on safety. Embedded finance makes it possible for enterprises to offer funding to their business customers without putting any of their own capital at risk. At YouLend, we also use a combination of different risk models that look at traditional credit risk information but also forward-looking digital data points that enable us to significantly expand the pool of eligible businesses.

👉If you want to learn more about embedded finance and how we help partners like eBay and Foodhub embed financing into their merchant offerings, we’d love to talk to you. Book a meeting here or through the Connected App.

Or, meet us at stand A40 🙋‍♀️

💡 Secure a 1-1 meeting below at Money20/20

Reach out to the YouLend team ahead of Money2020

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