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What is embedded lending?

Last updated:

March 5, 2024

2 minutes


When a tech company partners with a licensed financial-service provider to make lending products available on the tech company’s app or website, that’s embedded lending.

Toast Capital is a prime example. By partnering with a licensed lender, Toast enables restaurants to apply for and receive term loans in the Toast app. These loans are automatically repaid through a percentage of the restaurant’s daily Toast sales. (article continues below)

Toast Capital was launched in 2019. Just three years later, it was generating annual revenues of $14M.

For your company, embedded finance has the potential to generate significant revenue, data, and loyalty. For your customers, it can help them manage the timing of capital outflows (costs) and inflows (revenues). 

Common forms of embedded lending and financing include:

  • Cash advances
  • Invoice factoring
  • Credit + charge cards
  • Term loans
  • Lines of credit.
Originally published:
July 17, 2023

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