Visa, Froda and Lunar Launching Digital Solution for Small Business Loans

Visa, Froda and Lunar have partnered to launch a digital solution for business loans.

With this collaboration, Nordic digital bank Lunar will be able to offer its small and medium-sized business (SMB) clients access to business loans via Froda’s embedded lending platform as well as the ability to manage direct payments and repayments with Visa’s card, the companies said in a Thursday (Feb. 16) press release.

For SMBs, this means a fully digital experience, easy access to financing, instant payments and the ability to repay loans through recurring card payments — saving them the time and effort of tracking and managing monthly invoices — according to the press release.

“The solution Froda has developed offers something new to the embedded lending ecosystem,” Visa Regional Managing Director Nordics and Baltics Philip Konopik said in the release. “We are very excited to be part of this and can’t wait to see the impact it will have on small business lending.”

PYMNTS research has found that financial institutions of all stripes — from international players to community banks — are setting their sights on using embedded finance to revamp everything from payment processing to offering cash flow and accounting related services and loans.

More than 80% of banks either offer or plan to offer their clients the ability to use their own enterprise resource planning (ERP) systems to access accounts and make payments to suppliers or vendors, according to the “Embedded Finance Tracker,” a PYMNTS and Galileo Financial Technologies collaboration.

The report found that this will streamline interactions up and down supply chains where checks still account for more than 50% of B2B payments.

Lunar will make the embedded lending solution available to its SMB clients in the second quarter, according to the press release.

More SMB card issuers will be able to offer the solution as well via Froda’s application programming interface (API)-based, white-label product. Because it uses Visa’s infrastructure, it will provide a consistent experience across 200 countries and territories the release said.

“With the support of Visa, we are able to offer this innovative solution to both neobanks and incumbent banks across multiple markets,” Froda CEO Olle Lundin said in the release. “We couldn’t be more excited about this partnership and look forward to seeing this new ecosystem grow.”