From Embedded Finance to Financial Co-Pilots: The New Era of Small Business Lending

This post marks the first in our new series: “Shaping the Future of Small Business Finance.”

Over the coming weeks, we’ll explore the major forces transforming how small businesses access capital, manage money, and grow — from embedded finance and AI, to financial inclusion and the rise of the Passion Economy.

We begin with the foundational shift that’s already reshaping the landscape: how embedded finance is not only changing where small businesses get funding — but also how they manage their finances and make smarter decisions with less effort.

For decades, small businesses had one main route to funding: the bank. But traditional finance has always struggled to serve smaller firms. Long applications. Endless paperwork. High rejection rates.

Most large institutions are designed to serve big-ticket clients and deliver big profits — not to cater to local shops, side hustles, or digital-first microbusinesses.

That reality leaves millions of entrepreneurs facing unnecessary barriers when trying to access the capital they need to manage cash flow, invest in growth, or simply survive.

So, who is stepping in to fill the gap?

The answer isn’t more banks. It’s the platforms small businesses use every day to run their operations — from eBay and Worldpay to Uber Eats, Vagaro, and other vertical software platforms.

These platforms have become the digital infrastructure for modern small businesses. Most use six to seven different tools to manage everything from payments and sales to delivery, bookings, and accounting.

Crucially, these platforms hold two key advantages that traditional lenders lack:

• Trusted relationships — built through daily engagement
• Real-time data — offering a dynamic, accurate view of business performance

This makes them the ideal channel to deliver financial services: embedded, personalised, and contextual.

Embedded finance means integrating financial products, such as working capital, payments, or insurance, directly into the digital tools small businesses already use.

Take eBay Seller Finance. Instead of navigating a bank loan application, sellers receive personalised, pre-approved funding offers inside their dashboard. No forms. No waiting. Just a few clicks — and capital they can use to buy stock, invest in marketing, or smooth out cash flow.

This is finance at the point of need. Delivered without friction. Tailored to real performance. Embedded in the business owner's daily workflow.

It’s a model that reflects how small businesses actually operate — fast, digitally, and on the go.

But embedded finance is only the beginning.

What small business owners really need is more than funding — it’s help. They're juggling cash flow, payroll, inventory, marketing, and admin — often solo, and without the luxury of a CFO or finance team.

This is where the concept of a financial co-pilot comes in:

A smart, embedded partner that not only provides funding but also helps them make better decisions, manage operations, and optimise outcomes.

Imagine logging into your platform and seeing more than just performance metrics. Instead, you’re presented with:

• Cash flow forecasts based on real-time sales
• Automated prompts to pay employees or file taxes
• Marketing recommendations tied to your quiet hours
• Pre-approved funding offers tailored to your transaction history

This isn’t a future vision — it’s already happening through embedded partnerships with platforms like eBay, Worldpay, and Vagaro.

By using live, contextual transaction data, companies like Liberis are removing outdated hurdles like credit scores and paperwork — and replacing them with funding that’s fast, fair, and built around the business.

This shift isn’t just about smoother user experiences. It’s about economic impact.

• Less admin
• Fewer rejections
• Smarter, faster decisions
• Capital and insights delivered when and where they’re needed

For platforms, embedded finance strengthens customer loyalty and opens new revenue streams. For fintechs, it provides a scalable distribution model. But the real winners are small business owners — the entrepreneurs powering local economies.

This new model of embedded, intelligent finance is changing the game — but it’s also exposing a bigger opportunity.

In our next post, we’ll explore how access to fair finance drives economic mobility — and why fixing the SME funding gap could unlock growth for entire communities, not just individual businesses.

The second blog in the series explores Fair Access to Capital: How Finance Can Fuel Economic Mobility, diving into how inclusive financial solutions can drive upward mobility for small businesses and underserved entrepreneurs.