Why fintechs are emulating BNPL, EWA for business financing | PaymentsSource

Business financing is getting a facelift as fintechs try to cash in on the popularity of buy now/pay later lending and earned wage access. 

Small businesses require about $1.4 trillion in financing each year, according to the U.S. Treasury Department. But nearly half – 49% – small-business owners use their personal credit card for business purposes, according to Bluevine’s 2025 Business Owners Success Survey. And the Treasury Department said in a January small-business financing report that many small-business owners have expressed difficulty in finding information about finance products, including merchant cash advances, factoring or equity financing, which is contributing to a “less competitive market.” 

New payment fintechs are embracing the success of BNPL and EWA as they look to fill a void in small-business financing where credit is limited due to the difficulties of underwriting businesses. And that’s attracting the attention of investors. 

VC magnets

Two, a Norwegian business-to-business buy now/pay later lender, in July secured a 13 million euro ($15.1 million) funding round as it prepared for a wider U.S. expansion. The round was led by Idékapital and Shine Capital. 

Two provides trade credit through a white-labled BNPL and installment loan product that allows sellers to offer a digital delivery mechanism and terms similar to consumer BNPL loan products. Two also assumes the credit and fraud risk for their clients.  

Prior to its U.S. expansion, Two operated in the United Kingdom, Norway, Sweden and the Netherlands through partnerships with Santander, Allianz, ABN AMRO and Kredinor. 

Two is hoping to emulate the success of consumer BNPL by allowing businesses to pay and finance their purchases in the same way that consumers do, said Two CEO and co-founder Andreas Mjelde. But Mjelde maintains this is more than a simple rebrand. 

“Our customers were asking for U.S. functionality,” Mjelde told American Banker. 

B2B payments are one of the largest opportunities in fintech, according to Mathias Owing Maanum, a partner at Antler. Antler is a venture capital firm with a stake in Two. 

“Trillions in volume still move through manual processes, with poor user experience and limited access to credit,” Maanum said in a statement. 

Fintechs are also looking at the earned wage access model, which allows consumers to tap their earned but unpaid wages ahead of payday, to reshape the way small businesses access capital. 

New York-based Receive calls itself an “Earned Revenue Access” company, founder and CEO Ariel Blum said. The company secured $4 million in seed funding in July in a round led by Nex Gen Venture Partners, bringing its total funding to $7.1 million. 

“Our vision is to make capital move faster,” Blum told American Banker. “In the same way BNPL came with a new concept [of] pay in four over time, we’re coming with a new idea that says this is short term-liquidity for high duration.” 

Receive uses businesses’ first-party data to turn pending receivable payments into cash they can spend now. Its first partnership was with Titanium Payments to launch the Titanium Boost Business Mastercard for Titanium’s merchants. 

Two and Receive aren’t the only two fintechs pining for the promised greenfields of SMB lending. More than 650 startups are listed on Crunchbase as B2B BNPL companies. 

Fintechs often look to consumer financing to pick up ideas for business services, according to Lindsay Fitzgerald, general partner and co-founder of Vesey Ventures. 

“My partner [at Vesey] tends to work on consumer fintech, and I tend to work on business fintech. I always joke with her that all I need to do is look at what you’re doing and then I’ll do the same thing in two years,” Fitzgerald told American Banker. 

“Once the consumers get used to it, they expect it in their business lives, and then they adopt whatever they adopted in their personal life at work,” Fitzgerald said. “We have seen the advent of these like buy now, pay later and earned revenue access models working in B2B for exactly this reason: Business people are consumers when they’re not at work.” 

Corporate B2B payment sophistication tends to lag consumer payments, which helps provide opportunities for fintechs to solve for specific painpoints, said Adam Hallquist, principal at FTV Capital. 

“The business market on spending is four times the size of the consumer market,” Hallquist told American Banker. “There’s a lot of incentive to get this right.” 

Competition abounds

But fintechs not only have to compete with established payment companies like Block and Stripe and national banks such as U.S. Bank that offer revenue-based financing models, but also other forms of more traditional business financing, such as factoring, supply chain finance, trade terms, and traditional 30-, 60- and 90-day pay on invoices. 

B2B payment flows will also need to become more digitalized before these new funding structures can really take off, Fitzgerald said, noting that BNPL and EWA have largely been successful in the consumer realm due to the digital nature in the way consumers shop and are delivered the loans or funds. 

“That usually doesn’t happen in B2B,” Fitzgerald said. “That is slowly changing as you see more B2B marketplaces coming online.”

Fintechs can embed themselves in those marketplaces and use that data to make smarter lending decisions, she said. 

“If you bring lending or any product onto your platform, you can typically underwrite up to just seconds,” Fitzgerald said. “This is what the next generation of business lending is going to be if you not only offer [the loan] up on these platforms but actually consume the bespoke data that’s in these platforms and extend loans on top of it.”