Your merchants are running out of runway. Between higher costs, tighter margins and unpredictable cash flow, small businesses need capital to keep moving, and most cannot get it fast enough. In the Federal Reserve’s 2025 Small Business Credit Survey, about a third of small firms that applied for financing still faced a funding gap, and 45% applied for financing in the past year, the highest share since 2021. Demand keeps rising even as access fails to keep up.
That gap is not only a merchant problem but a signal for every ISO and software platform that serves them. Closing it takes more than access to capital. Businesses at different stages have different financing needs, from newer merchants looking for their first access to capital to established businesses investing in their next phase of growth.
The Traditional Path to Capital Was Built to Exclude
Traditional lending was never designed for the merchants you serve. A newer business with limited credit history gets turned away before it even starts. An established merchant that needs a larger, structured loan gets stuck in weeks of paperwork and underwriting. Both walk away, and both remember who could not help them.
The core problem is that traditional financing treats every business the same. It applies rigid credit criteria, slow approval timelines and a separate application process that sits far outside the tools merchants use every day. For a business that needs cash this week to cover payroll or restock inventory, “come back in a month” is the same as “no.”
The Right Capital for the Right Stage
Here is what most conversations about access to capital miss: the gap is not only about whether a merchant can get funding. It is about whether they can get funding that reflects their individual needs and the stage they are in. A single loan product will never fit every business, and treating every funding need the same is why so many merchants still struggle to access the right support.
Your merchant base spans startups with a few months or less of history through mature operations planning their next location. They sit at different points on the same curve, and each stage carries a different funding need.
- A newer business with limited credit history needs a first pathway to capital, like a starter offer to stock early inventory while it builds a track record
- A growing merchant needs fast, flexible funding to smooth cash flow through seasonal peaks and troughs, such as covering payroll through a slower month
- An established operation needs a larger, structured term loan to fund real growth, like renovating a site or adding a new revenue line
When a platform can only offer a single, one-size product, the merchants it does not fit are left to look elsewhere. A newer business will not qualify for a large term loan, and an established one will not settle for a small advance when it needs far more. Any merchant who cannot find the right fit inside your platform will find it outside your platform, and take the relationship with them.
Meeting every stage used to mean building relationships with multiple lenders or, worse, building a lending program yourself. Neither is realistic for most partners, so most settle for one funding option and quietly send everyone it does not fit somewhere else.
Close the Gap Without Becoming a Lender
This is where the model has changed. Embedded lending now lets platforms offer financing directly inside the software merchants already use, with eligibility based on real business performance data rather than a credit score alone. The market reflects the shift: analysts value embedded lending at more than $21 billion in 2025 and project it will grow past $250 billion by 2033, putting the infrastructure to deliver it within reach of any platform.
The strategic point for you is what you no longer have to carry. Offering access to capital used to mean taking on underwriting, servicing, compliance and the risk of every loan. That is no longer the case. The right infrastructure absorbs all of it, so you extend financing under your own brand while a specialist handles credit decisions, funding and regulatory obligations behind the scenes.
That changes the math: you deepen merchant relationships, open a new revenue stream and give businesses a reason to stay, without hiring a credit team or putting your own capital at risk.
What This Means for Your Merchants and Your Business
When financing lives inside your platform, the experience stops feeling like a loan application and starts feeling like a feature. Approvals happen in hours, not weeks. Funding reflects where the business actually is, not where a legacy credit model assumes it should be. And every time a merchant accesses capital through you, your platform becomes harder to leave.
In practice, that could mean a retailer purchasing additional stock before its busiest trading period, a restaurant replacing an essential piece of kitchen equipment without waiting weeks for a traditional loan process, a growing business hiring additional staff to meet demand, or an established merchant accessing the capital needed to open its next location.
For the platform, financing creates another way to support merchants beyond payments or software alone. Each additional service delivered through the platform strengthens the relationship, opens new opportunities for revenue and gives merchants more reasons to keep their business in one place.
That is the real opportunity in the small-business capital gap. The partners who close it will own a deeper, stickier relationship with their merchants, while the ones who ignore it keep sending their best customers to look for money somewhere else.
A Broader Range of Funding, Built In
This is the thinking behind our latest expansion of NMI Business Capital. Adding term loans and starter offers lets the program support a broader range of merchants and financing needs. Term loans give established merchants access to larger amounts with structured repayment for a planned expansion, while starter offers open a first pathway to funding for newer businesses, including those with limited credit history. Partners are not asked to select a product for each merchant. Instead, eligible businesses are presented with the financing offer available to them through the program, based on the underwriting process, so each merchant is matched to funding that fits their stage, all from a single program and without building or managing a lending operation of their own.
Business Capital has now funded more than $5 million to merchants. That means no separate loan portals, no manual underwriting and no new risk on your books, just a simpler, more connected route to capital for the businesses you serve.
Your merchants will need capital to grow, and the only question is whether they find it through you or somewhere else.
Ready to give your merchants a broader range of funding without adding risk to your business? Explore NMI Business Capital or reach out to our team to get started.
