Embedded lending: how platforms offer credit inside their products
Learn how embedded lending works, who does what in a program, how platforms fund the loans they offer, and where stablecoin disbursement and repayment fit.
Embedded lending puts credit inside products people already use, such as a payments dashboard, marketplace or wallet. The platform owns the moment of need and the data; a lender owns the credit decision and capital. This guide explains how programs are structured, how they are funded and where stablecoins fit.
A merchant sees a financing offer in its payments dashboard. A driver gets an advance in the app that pays them. A wallet customer sees a pre-qualified loan next to their balance. Each is embedded lending: credit offered where the borrower already is, priced with data the platform already has. It is the lending side of embedded finance.
Who does what
| Role | Responsibility |
|---|---|
| Platform | Customer relationship, offer placement and the data used for underwriting |
| Lender or originator | Credit decisions, loan terms, licensing and disclosures |
| Capital providers | Banks, credit funds or investors that fund the loans |
| Servicer | Repayment collection, reporting and collections after a missed payment |
One company can play several roles. Some platforms hold a lending license and fund loans themselves. Others partner with a bank or lender for every step after the offer.
Common embedded lending products
- Merchant financing: advances repaid from a share of card sales, such as a merchant cash advance.
- Point-of-sale credit: installment plans offered at checkout.
- Earned wage access and payroll advances: early access to pay already earned.
- Wallet credit: small loans offered to consumers inside a wallet or neobank.
- B2B working capital: working capital loans and invoice financing offered by software or logistics platforms.
How programs are funded
Funding sets how far a program can grow. Platforms typically fund loans from their own balance sheet at first, then add a credit facility from a bank or private credit fund, or sell loans to investors as they are made. Each lender sets caps, eligibility rules and terms, so a growing program often needs more than one funding source.
Where stablecoins fit
Stablecoins can carry money between all of these parties. A capital provider can fund the platform's facility, the platform or lender can disburse to the borrower, and repayments can flow back the same way. Transfers settle near-instantly, 24/7, and transfer memos can link each one to a specific loan.
Tala and the El Dorado wallet show the model. El Dorado provides the wallet and customer relationship, Tala handles underwriting and capital, and loans and repayments move in stablecoins, starting with eligible customers in Bolivia.
Stablecoin rails do not replace licensing, underwriting or servicing. They change how quickly and transparently money moves once those are in place.
FAQ
What is embedded lending?
Embedded lending is credit offered inside a non-lending product, such as a payments platform, marketplace, wallet or software tool. The platform presents the offer at the point of need, while a licensed lender or the platform's lending entity makes the loan.
Who takes the credit risk in embedded lending?
It depends on the program. In some, the partner lender funds and holds the loans. In others, the platform holds some or all of the risk, funds loans through a credit facility, or sells loans to investors.
How is embedded lending different from embedded finance?
Embedded finance covers any financial product built into a non-financial experience, such as payments, accounts or cards. Embedded lending is the credit part of it.
Explore credit on Tempo
Stablecoins let credit move like a payment: funded, drawn and repaid at any hour, with each transfer tied to its loan. If you run or fund an embedded lending program, get in touch to see how that works on Tempo.