This partnership formalised through a loan and receivables sale agreement along with a marketing and servicing agreement, was disclosed in a filing with the Securities and Exchange Commission (SEC).
Under this agreement, WebBank will exclusively issue Sezzle's subscription and card products. The partnership is expected to commence in September, pending the completion of confirmatory testing and procedures.
WebBank will provide loans to US customers for financing purchases through the Sezzle platform and its direct merchant network. Sezzle will manage the program, handling marketing, administration, legal compliance, and ongoing servicing, subject to WebBank’s review and approval of underwriting criteria.
In addition to this partnership, Sezzle also announced a new initiative called Sezzle Capital, in collaboration with Embedded Finance platform Liberis. This program aims to offer flexible funding solutions to small and medium-sized businesses (SMBs) in the US, with plans to expand to Canada. The initiative is designed to provide SMBs with financing options without requiring equity relinquishment.
Embedded Finance represents a significant evolution in the financial services industry, where financial products and services are integrated into non-financial platforms. This trend allows companies to offer financial solutions – such as payments, loans, and insurance – directly within their existing digital environments. For instance, Sezzle's recent partnership with Liberis exemplifies this trend, as it integrates financing options into its platform, enabling SMBs to access capital without having to navigate traditional banking channels. This approach not only improves the user experience but also broadens the reach of financial services to a more diverse audience.
Embedded Finance platforms are transforming the way SMBs access capital, providing them with new funding avenues that bypass conventional financial intermediaries. Traditional lending often requires significant equity or lengthy approval processes, which can be a barrier for SMBs seeking quick and flexible funding. Embedded Finance solutions, however, simplify this process by embedding financial services into platforms that businesses already use, such as Sezzle's BNPL services. This integration allows SMBs to obtain financing with greater ease and efficiency, reducing reliance on traditional financial institutions and expanding their growth opportunities.
The integration of financial services into non-financial platforms is reshaping the landscape of business funding. By offering funding options directly within the context of a business's regular operations, Embedded Finance solutions lower the barriers to capital access and foster financial inclusivity. For SMBs, this means more accessible and tailored funding solutions that align with their specific needs and operational contexts. The ability to secure financing without giving up equity or undergoing lengthy approval processes not only supports business growth but also improves financial agility, positioning SMBs to better navigate market challenges and seize new opportunities.
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