The pinch-point for many vendors selling products and services through marketplaces is inconsistent sales, resulting in uncertain cash flow. Research from Vodeno found that cash flow management is one of the major issues faced by the majority (62%) of European SMEs, underlining the need for alternative types of finance.

Embedded financing can offer some advantages over standard financing. For instance, factoring or revenue-based financing accessed by businesses directly through marketplaces means less admin for that business because repayments are made directly from sales. For time-pressed ecommerce businesses with cash flow gaps due to a marketplace’s payment terms, this can provide an elegant solution.

Embedded finance also streamlines the customer journey and reduces financial friction, meaning increased sales for the vendor, creating a more successful partnership between the vendor and marketplace.
We know there is growing appetite for embedded finance from business customers to help them solve payment challenges, streamline processes and make critical financial savings.

A Capgemini study found 60% of small and medium-sized businesses wanted embedded financial services to smooth their payment processes, while 50% believed this would give them better data they could use to improve operations.