Embracing Embedded Lending: Why Every Company Should Become a Lender

Creating seamless financial journeys for consumers is trendy today but will likely become inevitable for the successful brands of tomorrow. If there were ever a time to catch the embedded lending wave – the time is NOW.  

Philosophy tells us that change is the only constant in life, and the same is true of business. What probably won’t ever change about business is that companies will always want to keep growing profits, but only those who can adapt to the rapidly evolving landscape of commerce will be able to do so.  

The answer is embedded lending. 

As consumerism continues to grow, companies are presented with an opportunity to leverage the growing demand for more payment options in new and creative ways. Gone are the days of leaving money on the table by excluding customers who would be willing to make purchases if only they had convenient access to financing. 

The companies with enough foresight to fill these gaps with embedded lending strategies are revolutionizing the ways they engage with their customers, generate revenue, and remain competitive. 

For the companies that haven’t caught up yet, the good news is: there’s still time to put these strategies into action and untap the potential for a host of revenue-boosting benefits.  

The Benefits of Embedded Lending

Diversifying Revenue Streams

Traditional revenue models can be limiting. Embedded finance introduces an entirely new revenue stream, one that goes beyond the primary products or services a company offers. By becoming a lender or offering financial services, companies can generate additional income through interest, fees, or revenue-sharing agreements. This diversification of revenue can provide a buffer during economic downturns or unexpected shifts in the market. 

Expanding Customer Base

By adopting embedded lending strategies, companies can attract a wider customer base. Think about it: offering flexible payment options, such as Buy Now Pay Later (BNPL), can make your products and services more accessible to a broader audience and lessen shopping cart abandonment. Younger generations, in particular, are increasingly looking for convenient and flexible payment methods that suit their financial preferences. Embracing embedded lending, through BNPL or other short-term financing products, allows companies to tap into this demand and establish a strong foothold among younger consumers. 

Boosting Customer Loyalty

Embedded lending isn’t just about facilitating transactions; it’s about creating a lasting relationship with customers. When companies provide financial solutions that align with their customers’ needs, they build trust and long-term loyalty. This often translates into repeat business and positive word-of-mouth recommendations. 

Many Successful Brands of Tomorrow Will Become Lenders. Don’t Get Left Behind. 

We’ve come a long way since consumers had to go to brick-and-mortar banks for access to financial services. Today, finance – lines of credit, lending, crypto trading, and more – is wherever the consumer is. The companies that understand this concept best and take the steps to execute the right strategies today will likely continue to experience exponential growth. 

One of the most profitable forms of embedded finance is embedded lending. When the unit economics aren’t looking great and the costs to acquire and retain customers are rising above sales, embedded lending can be a great strategy to diversify revenue streams and help make customers stickier.  

While extremely scalable with potential for great profit margins, lending isn’t typically an easy feat. It requires the right level of time, investment, and dedication to remaining compliant with the associated regulations. 

But just because something is hard doesn’t mean it’s not worth it. It’s time to face the future of commerce and ride the embedded lending wave today. 

About Bloom Analytics 

Bloom Analytics delivers a full suite of customizable solutions that enable fintechs and non-financial brands to become lenders and secure new revenue streams. Schedule a consultation to learn more. 

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