How You Can Create a New Revenue Stream with Embedded Lending

Embedded lending has not only transformed lending as we know it, but it has also flipped the old revenue model completely.  It’s no longer enough to redirect users to third-party lenders; the future lies in embedding credit where it’s used, when it’s needed and at the point of the decision. So any business can now integrate a line of credit in its customer journey, which represents a new revenue stream for millions of businesses.

Embedded lending has grown far beyond routine BNPL buttons at checkout or simple point-of-sale financing. It’s a quantum shift that’s turned lending from being product-centric into an end-to-end experience. This has fundamentally altered how revenue is generated, how customer stickiness is built, and how platforms unlock potential demand. This blog dissects how to do all of this with real-world context, strategies, and the latest industry observations.

What Embedded Lending Really Is

Embedded lending is the seamless integration of credit/lending capabilities into non-financial digital experiences. Think of financing offers appearing right in accounting packages, existing systems, ERPs, CRMs, or a marketplace supply checkout, or a B2B procurement flow. Unlike traditional lending that forces users to exit the buying journey and complete paperwork in isolation, embedded credit helps users get the funding they need in one seamless journey, substantially increasing conversions and capturing demand at the moment of need.

Embedded lending is a part of the broader umbrella of embedded finance, which includes payments, wallets, insurance, and wealth features integrated via APIs into platforms, existing systems or workflows that traditionally had nothing to do with finance. The embedded finance ecosystem is forecasted to process Over $7 Trillion in Transactions By 2030.

Why Embedded Lending Is a High-Value Revenue Engine

Revenue Beyond Traditional Fees

Traditional product revenue, whether product sales, subscriptions, or service fees, hits a limit. Embedded credit unlocks recurring credit income, including:

• Interest margins: the spread between the cost of funds and what you charge borrowers
• Origination fees paid per loan issued
• Interchange and platform fees when financing is linked to transactions
• Data and analytics monetisation where lending insights help cross-sell and up-sell other products

Platforms with high user engagement can turn credit into a predictable income stream rather than an afterthought.

Revenue Through Improved Conversion and Higher Basket Size

Embedded credit isn’t just a feel-good feature; it tangibly boosts conversion. For example, merchant and marketplace platforms that offer financing experience:

• Higher average order value
• Increased repeat purchase behaviour
• Reduced abandonment at the checkout stage

When users see an in-context credit offer pre-approved or with minimal friction, the probability of purchase rises significantly, sometimes by 34% or more, depending on the product and market situation. This helps strengthen the customer relationships and provides them with an enhanced overall experience, improving engagement and sales volumes.

New Monetisation for B2B

B2B platforms increasingly embed working capital, invoice financing, receivables lending, and revenue-based credit directly into workflows that power suppliers and SMEs. Instead of chasing financing externally, businesses get credit where it matters, and the platform earns interest, fees, and data-driven insights that deepen commercial reliance.

This is not trivial. Traditional SME lending has historically been expensive to originate and risky to underwrite. But embedding credit inside existing transactions reduces acquisition cost and allows for real-time underwriting based on platform data.

An excellent example would be Pulse’s Unified Lending Interface (ULI), which empowers banks, lenders, brokers, and non-financial entities to leverage embedded lending by integrating it into existing systems like ERPs, CRMs, accounting packages and legacy systems. With Pulse ULI, stakeholders gain access to a powerful suite of solutions that automate, expedite and streamline the entire lending journey.

For example, Pulse’s Loan Origination System (LOS) digitises and automates the loan application process, reducing it to under 3 minutes. Brokers can send one application to multiple lenders simultaneously via the ULI ecosystem, and non-financial entities can offer lending as a service (LaaS). Loan origination is not complete without quick, accurate underwriting. Enter Einstein aiDeal: Pulse’s automated underwriting engine, which is capable of auto-decisioning 95% of all incoming deals in under 45 seconds each. With ULI, the journey continues past disbursement in the form of Pulse’s Loan Management System (LMS), which provides a system that helps track repayments, manage delays and mitigate defaults with automated reminders. The result? Seamless embedded lending that offers bespoke solutions to potential borrowers within their existing systems, precisely when they need it.

With ULI, banks, lenders, brokers and non-financial platforms can offer lending as a service, scale operations, embrace credit risk automation, maximise revenue, and offer embedded credit products seamlessly, with flexibility and embedded compliance. Customisable criteria also enable stakeholders to create new lending products based on their risk appetite, thus unlocking even more venue streams. To learn more about how you can leverage embedded lending as a revenue source, contact us today.

The Strategic Playbook for Creating Revenue with Embedded Credit

Identify Contextual Lending Moments

Revenue grows when loans are offered at the exact moment a customer actually needs them, not as a random extra option. Many companies just add a loan feature as an afterthought, like placing a small “Need financing?” button somewhere on the page. That’s a pointless addition.

What works better is contextual lending. This means the loan shows up inside the flow or journey the customer is already taking. For example, if someone is about to pay for something expensive and might hesitate, the financing option appears right there, with terms that make sense for that purchase, and adds genuine value.

Ask:

• When does a user need financing?
• What user behaviour signals a higher intent to borrow?
• Can you embed credit into an existing workflow rather than interrupt it?

Examples:

• Cash Flow Loans: Offer short-term financing to SMEs through a cash flow forecasting tool like aiPredict. A forecast that indicates an upcoming cash flow crunch can trigger a contextual offer to pop up.
• Inventory procurement: Allow suppliers to automatically finance bulk orders within the platform checkout UI.
• Accounting packages: Embedded lending offers that surface in an accounting package customised to suit the financial situation of the borrower. For example, if an SME has invested heavily in new equipment and faces limited liquidity for the upcoming season, an embedded credit offer tailored to their needs would add immense value.

Data from embedded lending implementations shows that contextual credit offers convert at significantly higher rates than generic offers, as mentioned previously.

Leverage Alternative Data + AI for Risk

Embedded lending isn’t just placement, it’s smart placement. Traditional credit models often exclude customers or produce high acquisition costs. Modern implementations layer alternative data signals, platform usage behaviour, transaction history, and engagement frequency into AI-driven credit decisioning engines like Einstein aiDeal, for example. The result:

• Higher approval rates
• Lower default risk
• Personalised terms that actually fit user profiles
• Fast lending decisions and quick dissemination of funds

Platforms like LoanTube and others saw meaningful increases in user activity and better credit performance when AI-powered underwriting was introduced via Pulse’s ULI.

For advanced operators, the secret sauce isn’t just embedding lending it’s embedding contextual intelligence that predicts not only creditworthiness but willingness to borrow and probability of repayment.

Optimise Pricing, UX, and Compliance

Revenue growth isn’t linear, and effective embedded lending demands:

• Clear and fair pricing that’s both competitive and reliable
• User Interface or journey that feels native, and not like an add-on
• Automated compliance and documentation embedded into the workflow

Regulations like open banking data access and credit transparency guidelines are evolving constantly. It’s vital to get compliance right from the beginning, instead of retrofitting it later, and risking customer distrust or regulatory breaches. For example, Pulse offers embedded compliance in all of its solutions, including Pulse ULI’s lending ecosystem. This reduces compliance burden and friction, making the lending journey seamless and within regulatory frameworks.

The Bottom Line: A Sustainable Revenue Engine

Embedded lending has become a structural shift in how credit is offered and monetised. When done right, it transforms lending from a cost centre to a strategic revenue-generating engine that strengthens user engagement, unlocks higher lifetime value (CLTV), and creates a persistent advantage for banks, lenders or non-financial platforms that want to monetise embedded lending For companies that are serious about long-term monetisation and product-led growth, embedded lending isn’t just a missed opportunity; it is a crucial method to embrace scalability, automation and massive revenue potential.