The launch of Froda’s embedded lending solution follows a successful test period and the goal is to make it faster and cheaper for Danish small businesses to access financing and secure the necessary capital to drive growth.
Small and medium-sized enterprises (SMEs) make up 99% of all Danish businesses and play a vital role in Denmark's economy and competitiveness. However, SMEs often face obstacles when in need of financing, which hinders their growth potential.
To address this, the Swedish fintech company Froda, in collaboration with Visa, has developed card-based embedded lending, a new loan solution that uses card rails for payouts and repayments. The solution is offered as a white label product through Froda Embedded to partners that are issuers of Visa business cards.
Froda officials expressed that their initial idea has transformed into a tangible achievement, all thanks to their collaboration with Visa and Lunar. Throughout the testing phase, they witnessed substantial interest in the solution from Danish entrepreneurs, leading them to consider Denmark as the logical progression in their venture.
The process is fully digitised and by using Visa cards for payouts and repayments, the entire loan process can be shortened from the typical two months, to a few minutes. This innovation in the market ensures both speed and efficiency for small businesses when they are in need of financing.
Card-based embedded lending was introduced earlier in 2023. With Visa's extensive presence in over 200 countries and territories, the product offers a consistent experience across markets, making it globally scalable. Lunar has become the pioneering partner to introduce this product to the Danish market.
Lunar officials announced their role in introducing an innovative financing option for small businesses in Denmark. They emphasized the convenience of applying through their app, where applicants can expect a non-committal offer within minutes. Moreover, Lunar provides an enticing price guarantee, ensuring their product remains competitive and aligns with their objective of establishing an enhanced financing solution for small businesses in the Nordic region.
During the spring, a selected group of Lunar's Danish customers had the opportunity to test a beta version of the product. The results were positive, with over half of the customers expressing great interest in this financing solution.
The product will be available to all Lunar customers in Denmark from 20 June 2023. Lunar is building the everyday bank for private and business customers and aims to make running a business in Denmark easier. The partnership with Visa and Froda aims to increase financing options, particularly for smaller businesses.
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