[Unit] Introducing the simplest way to embed lending into your product

Originally posted on Unit.co

By David Sinsky, Vice President, Lending

Today, we’re excited to launch Lending, the fastest and easiest way for companies to extend capital to their customers through their product.

For many businesses, getting capital to grow and manage their cash flow is crucial. But many companies struggle to prove their creditworthiness and get denied financing, or are offered capital at unaffordable rates. For example, our research shows that 70% of small businesses said their hardest task has been trying to secure capital. Additionally, over 60% of small businesses said they struggle to get paid promptly and need faster access to funds.

Software companies can build a better lending experience

Innovative software companies are already leading the way by building better lending experiences. Companies like Toast, Shopify, and Square have made it easy for their customers to get capital from them, paving the way for more companies across more industries to offer better lending and financing to their customers.

Imagine a small business that helps homeowners with their home heating and cooling needs. Like most small businesses, cash flow is tight, and they need to cover expenses for inventory, equipment maintenance, and payroll. However, they’ve seen steady growth and have historically had strong sales during warmer and colder months. While a bank doesn’t have visibility into those proprietary data points, their software platform does. Because of this, the software company is uniquely positioned to offer credit, right in the same platform the business owner is already using.

Software companies are best positioned to offer credit products, due to a deep understanding of their customers. They can combine financial and operational data to underwrite better, offer more favorable terms, and provide lending solutions to businesses where they’ve been historically underserved by traditional lenders. In a survey by EY, a majority of respondents believe that more than 50% of financial services will be offered via non-financial services platforms in the near future.

Introducing Lending

With our new Lending capabilities, software companies can now extend capital instantly to their customers, generate significant new revenue streams and improve customer satisfaction.

With this expansion, Unit is becoming the complete embedded finance platform that it set out to be from day one. Lending is a natural evolution for what we’ve built over the years: bank relationships, management tools, developer tools, and more. We’ve been working with dozens of enterprise software companies, and learned that they all seek a unified, complete embedded finance platform.

Grow your business, faster

Lending is a powerful revenue generator. It allows you to provide new value to your customers, and in return make money several different ways including financing, fees, interchange, and subscriptions. Businesses that get capital spend more than companies who don’t. That spend generates higher interchange when a Charge Card is used. Additionally, those businesses grow across multiple dimensions and have higher lifetime values. They stay in business longer, grow larger, and are easier to retain.

In under a year since launching our first Charge Card customer, we have seen incredible market feedback and early customer success. Companies like Nav have seen customers that use embedded banking and lending products have a 35% higher NPS than those who don’t, and those customers are 2.5x more likely to adopt additional products. Similarly, Outgo has combined banking and financing, creating an innovation that allows freight carriers to access funds from an invoice early, for free. About 10% of Unit clients have adopted Lending products including Toolbox who use lending to transform cash flow for those in the construction industry, and Highbeam who power the growth of consumer brands with capital.

Launch quickly and easily

Our Lending product suite makes it simple to provide capital to your customers in weeks. When you work with Unit to offer lending, you get:

  • Capital and underwriting built-in: Offer your customers the capital they need to grow top line revenue without impacting your balance sheet or sourcing funding yourself. Unit provides access to capital and the underwriting necessary to launch quickly, so you can start offering your customers value immediately, and build a sustainable lending program.
  • Low-code and no-code options: To make launching simple, we’re excited to also announce that our White-Label solutions support lending experiences. You can launch in a few weeks with little to no engineering resources. Lending works seamlessly alongside accounts, cards, and payments so you can build a complete product all on one platform. The application form gives customers a simple way to apply for financing. The accountcard, and activity components allow them to manage their spend and accounts. 
  • Streamlined compliance: Unit helps you get to market faster and safer by simplifying compliance, behind the scenes. We’ll match you with bank partners that can support your lending program and together handle the bulk of the compliance requirements throughout the entire financing lifecycle, from application to repayment.

Building a lending program has traditionally been extremely costly and complex. Procuring capital is expensive and time consuming, possible only for the largest companies who were willing to raise debt facilities. Companies would also need to hire teams and create tools for underwriting, origination, servicing, collections, and the orchestrations required to make decisions, deliver funds, and get repaid.

Unit is now making it even easier for companies to offer lending and financing products and get to market faster. Now, companies can launch fully-featured lending and financing products without needing to have the capital, understand the jargon, add headcount, or build a stack of technology solutions

The right capital for your audience

Businesses' capital needs are not one-size-fits-all. To create the product that meets the unique requirements of your customers, Unit helps you deliver a comprehensive suite of lending and financing products to serve different use-cases and cash flow needs:

Get started

Embedding lending should be easy. We’re here to make it simple, with our product and guides. Visit our website to learn about our Lending products and read our documentation to learn about implementing them using White-Label Components.


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