We recently connected with Yaacov Martin, CEO of The Jifiti Group, who shared insights on embedded finance and how SMBs acquire financing.
A survey and research study recently found that 83% of lenders now offer embedded finance to consumers, but only 55% do the same for SMBs. According to Martin, it is surprising, given how much small businesses lean on credit to keep their doors open and grow.
Martin has been working with banks in the U.S. and Europe to close this gap quickly, and he shared insights on why only 55% of lenders serve SMBs with embedded lending products and how to bridge this gap.
He commented on what banks need to embed their loan and credit products into ERPs, invoicing, and POS systems. He also discussed how a digital, automated, and real-time lending process fosters SMB loyalty. And, how banks can lead and benefit from SMB embedded lending.
Our discussion with Yaacov Martin is shared below.
Crowdfund Insider: The recent industry data shows that only 55% of lenders are currently serving SMBs with embedded lending products. From your perspective, what’s driving this significant gap in the market?
Yaacov Martin: There’s a real disconnect here—not because lenders don’t want to grant Small-to-Medium Businesses (SMBs) real-time, digital access to financial products, but because many still don’t fully know how and don’t have the requisite technological expertise and capabilities. SMBs are notoriously difficult to underwrite.
They don’t always fit neatly into the risk models that were built for large enterprises or consumers. And when you add the tech complexity of seamlessly embedding loans into third-party platforms, a lot of lenders get stuck since, at the end of the day, they are not tech companies.
But the demand and expectation are there—SMBs are becoming increasingly digital in their operations. They have come to expect the same seamless, real-time access to financing as they get in their personal lives, embedded within the tools they already use to run their businesses, whether that’s inventory software, a POS system, or an online marketplace. The gap, then, is less about demand and more about inertia on the supply side.
Crowdfund Insider: Which types of lenders are winning in the embedded SMB space right now—traditional banks, fintech companies, or alternative lenders? What gives them the competitive edge?
Yaacov Martin: The fintechs and digitally native alternative lenders carved out the market and are ahead in the space, but those banks that are forward-thinking will ultimately win in SMB embedded lending.
Banks that digitize their SMB lending will have the competitive edge, as they are the seasoned experts when it comes to lending to businesses, have the lowest cost of capital and can leverage their balance sheet strength.
However, they have fallen behind because their legacy systems aren’t agile like those of their fintech competitors, their business onboarding and lending processes are typically manual, and they lack the technology needed to make automated, real-time decisions.
What fintechs have done exceptionally well is to embed financing directly into the workflows of SMBs—meeting them where they are, when they need capital most. But banks that overcome their technological hurdles have a real opportunity to combine their regulatory credibility and cost advantage with modern business onboarding and loan distribution strategies. The key will be partnerships, APIs, and platform-first thinking.
Crowdfund Insider: For lenders who’ve implemented embedded SMB products, what are the key measurable business impacts: higher loan volumes, faster origination, better customer retention, or something else?
Yaacov Martin: The straightforward answer is all of the above—and more. But what I find most compelling is the impact it has had on SMB onboarding. Embedded lending doesn’t just reduce friction in the overall lending process; it also makes the typically manual and cumbersome business onboarding process more efficient, automated, and digital.
SMB lending typically entails two distinct journeys. The first is to onboard new-to-bank businesses into the bank’s system and the second is the lending journey itself. Business onboarding requires various checks and balances—such as ID verification, fraud checks, and so on—which have generally been manual and time-consuming. Embedded lending technology takes away all the manual work by seamlessly incorporating technology tools that do these checks automatically and in real time. This then frees time and resources for lenders to focus on other strategies to further drive growth.
Crowdfund Insider: What role do platform partnerships play in closing this gap? Should lenders be focusing on ERP providers, e-commerce platforms, or industry-specific software companies?
Yaacov Martin: Working with multiple technology partners sounds good in theory, benefiting from each of their expertise, but it’s actually a recipe for headaches.
Instead, it’s preferable to find one solid tech provider who has a robust third-party ecosystem or orchestration layer, and the technological capability to plug into the major e-commerce platforms, software systems, and other tools that small businesses actually use.
When everything is bundled together like this into a single platform, the lender gains the optimal value and the ability to easily scale their lending through multiple channels.
This also enables lenders to get to market faster and in the most efficient manner, as instead of dealing with five different vendors, each with their own contracts, their own compliance requirements, and technical nuances, lenders only need to work with one platform that handles everything. That means access to many more SMB lending distribution opportunities without the administrative chaos.
The real win here is that lenders can actually focus on their core competencies—lending—instead of investing months and important resources into wrestling with infrastructure and API integrations. It’s not just about being the first to market—it’s about being able to scale the offering without drowning in operational complexity.
Crowdfund Insider: For lenders reading this who want to enter the embedded SMB space, where do you recommend they should start? What’s the lowest-risk, highest-impact entry point?
Yaacov Martin: I recommend focusing initially on your existing SMB customers. Offer them pre-approved financing that actually fits their credit history and spending patterns—delivered straight through your existing channels, like your website or app. It’s a low-risk way to build and test your embedded lending model, since you’ve already got the trust, the data, and a direct line to the customer.
After establishing momentum in your existing ecosystem, the next phase centers on acquiring customers via embedded finance partnerships. This involves incorporating your lending solutions into third-party platforms that SMBs interact with regularly, including point-of-sale systems, ERP platforms, digital marketplaces, or specialized industry ordering applications.
To summarize: start where your risk is lowest and your insight is strongest—your own customers. Use that foundation to build operational confidence; from there, you can expand via embedded distribution partnerships that match your ideal customer profile and align with your risk appetite and product strategy. This phased, data-driven embedded lending approach balances risk with scalability and sets you up for long-term success in the SMB embedded lending space.