Aarhus-based digital banking app Lunar and Stockholm-based online lending platform Froda have teamed up with Visa to introduce a card-based embedded lending solution. The goal is to provide faster and more affordable financing options for small businesses in Denmark, enabling them to secure the capital needed for growth. Lunar, a digital challenger bank, aims to simplify and enhance financial lives, while Froda specializes in digitized, tailored business loans. This partnership promises to revolutionize small business financing in Denmark, benefiting entrepreneurs across the country.
Small and medium-sized enterprises (SMEs) make up 99 percent* 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.
“It started with an idea and a sketch on paper more than a year ago, and now it has become a reality thanks to our partnership with Visa and Lunar. We have experienced a significant demand for the solution among Danish entrepreneurs during the test period, making Denmark a natural next step on our journey,” says Olle Lundin, co-founder and CEO of Froda.
The process is fully digitized 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 breakthrough in the market ensures both speed and efficiency for small businesses when they are in need of financing.
“We are constantly working to find new, innovative ways to utilize the card infrastructure, including through strong partnerships. In collaboration with Froda and Lunar, we can digitize the entire loan process and ensure a seamless and fast process for the benefit of small businesses,” says Philip Konopik, Regional Managing Director at Visa in Nordics and Baltics.
Card-based embedded lending was introduced earlier this year. 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 will be the first to launch an entirely new type of financing for small businesses in Denmark. It is easy to apply through our app, and you receive a non-binding offer within a few minutes. Additionally, we offer an attractive price guarantee, making our product extremely competitive and supporting our goal of building the best everyday bank in the Nordic region, especially for small businesses,” says Anne Marie Kindberg, Chief Revenue Officer of Lunar Group.
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.
“It is fantastic to see such interest in the product. It demonstrates a clear need for innovative financing solutions. The partnership with Visa and Lunar has significant potential and enables us to expand our offering with business loans across markets,” says Stella Snickare, VP Froda Embedded.
The product will be available to all Lunar customers in Denmark from the 20th of June. Lunar is building the best 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.
