Close to half of loan applications made to embedded finance partners received a decision within two minutes during the first quarter, according to data from business lender Iwoca.
This compares to just 12 per cent of direct applications, highlighting the benefits of embedded finance, where financial services are embedded within non-traditional financial services areas.
The first-quarter data also showed that small business applications via embedded finance partnerships were 58 per cent more likely to be approved than those that applied to Iwoca directly.
Close to 30 per cent of all loan applications to Iwoca now come through embedded finance partners. Businesses can access loans from Iwoca through a range of platforms, such as accounting software and digital neo-banks including Xero, Tide and Funding Options.
The business lender noted that as the big banks reduce their risk appetite, embedded finance will make it easier for small and micro businesses to access finance, which should speed up the economic recovery.
Colin Goldstein, commercial growth director at Iwoca, noted that the technology behind embedded finance has huge potential for SMEs, and “the possibilities to embed finance are vast”.
“Iwoca has led the way in developing embedded finance products, and well over a quarter of businesses we are now serving come through our embedded finance partners,” he added.