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What is embedded lending?

By Ben Tabas, Intrica Research · Updated · US

Answer

Embedded lending is credit offered inside a company's own product, such as a software platform or checkout, while a bank or finance partner funds and underwrites the loan. Stripe's Capital for platforms docs, checked Oct. 28, 2026, say Stripe and its partners handle underwriting, funding, servicing and collections, and repayment comes from a fixed percentage of each sale.

How it works

The platform already sees its users' sales data. A lending partner uses that data to prequalify users and make offers inside the platform.

Stripe's docs, checked Oct. 28, 2026, say it prequalifies connected accounts daily from their payment activity. Its sample offer is 20,000 in principal, a 15% payment rate and a 2,000 flat fee.

The same docs name the US providers. Flex and fixed term loans come from Celtic Bank or Lead Bank, and merchant cash advances come from YouLend.

Common forms

  • Term loans repaid from a share of each sale.
  • Merchant cash advances, which Stripe's docs describe as a purchase of future receivables, not a loan.
  • Lines of credit drawn inside the platform.
  • Buy now, pay later at checkout for consumers. The CFPB says it withdrew its 2024 BNPL interpretive rule on May 12, 2025.

What a platform decides

  1. Choose a partner that funds and underwrites, or a bank partner you manage yourself.
  2. Decide whether offers carry your brand or the partner's.
  3. Check licensing in each market. Stripe's docs say platforms in Germany may need a credit broker license and platforms in France may need ORIAS registration.
  4. Confirm who carries credit losses. Stripe's docs say platforms using its branded offers are not liable for them.

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Sources

  1. Stripe Capital for platforms · Stripe, Oct. 28, 2026Supports: Checked Oct. 28, 2026: how platform lending works, the sample offer, US providers, licensing notes and liability for credit losses.
  2. Stripe Capital · Stripe, Oct. 28, 2026Supports: Checked Oct. 28, 2026: the financing types Stripe Capital offers and the countries it covers.
  3. Shopify Capital · Shopify Help Center, Oct. 28, 2026Supports: Checked Oct. 28, 2026: a second platform offering merchant cash advances and loans to its merchants.
  4. Buy Now, Pay Later (BNPL) products · Consumer Financial Protection Bureau, July 1, 2025Supports: The May 12, 2025 withdrawal of the 2024 BNPL interpretive rule.
  5. Request for Information on Bank-Fintech Arrangements · OCC, Federal Reserve Board and FDIC (Federal Register), July 31, 2024Supports: Lending listed as one of the main categories of bank and fintech arrangements.

Related questions

General information, not legal advice.

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