If you’re building a B2B marketplace, it’s a safe bet you’re already well-acquainted with the complexities of balancing the dueling needs of both buyers and suppliers. Your buyers want extended payment terms, while your suppliers usually ask for quick payouts to keep their production going. Without an ongoing, workable solution, this tension can stifle your growth.

Integrating financial services into your platform is not just about supporting buyers and sellers—it’s a powerful monetization strategy. It builds trust on both sides of the transaction and opens new revenue streams for your marketplace. But not all financing solutions are created equal, so you have a decision to make: do you build a custom financing solution from scratch, or do you partner to implement one? Both paths have pros and cons, and the one you choose will have a significant impact on your marketplace’s future.

Option 1: Build your own financing solution

Why build one yourself?

With this approach, you get to customize everything to fit your exact needs, and you get to own the entire process from start to finish. However, let’s look at that another way. You have to customize everything to fit your exact needs, and you have to own the entire process from start to finish.

Let’s look at the steps to building one.

How to build your own B2B financing solution:

Tech stack

You’ll need to build the right infrastructure. This means setting up nuanced ledgers, reconciliation routines and customer service tools. You’ll need a product team to manage these tools, and their expertise can be expensive. The team will also need to stay on top of ongoing maintenance, bug fixes and software updates.

Capital

When you offer financial services like payment terms and instant payouts, you need a pool of money to pull from. Are you dipping into your own funds, reaching out to investors, or something else? Each option comes with its own timeline and requirements, so you’ll need to plan ahead.

Licenses

The licensing requirements—in addition to legal requirements—are extensive. Depending on your approach, you may need a banking license, a PSP license or a factoring license. Start on these early—they take months and have strict requirements.

Risk management

Building means you’re taking on all the risk. You’ll need a risk team to manage who gets a line of credit and how much, plus determine the acceptable repayment terms. The more your marketplace grows, the more intricate risk management becomes.

Compliance

You need the right legal and compliance setup in place. This means making sure you’re following all the latest rules and regulations.

Operations

Creating your own financing solution means handling customer support and dealing with overdue collections. So, you’ll need to invest plenty of time and manual work, plus put a system in place to correct human error—an important step, as there are many moving parts.

In summary: full control means full responsibility.

Building your own financing solution offers complete control and customization. It’s ideal if your marketplace has unique needs and you have the resources to manage the complexity. However, be prepared for the significant investment in time, money, and expertise.

Option 2: Buy an external financing solution

Why team up?

Partnering with external providers gives you access to a ready-to-go marketplace financing solution that scales with your business and can still be tailored to your specific needs. However, not all partners and partnerships are created equal, so let’s look at your options and talk about strategies to make sure you find a partner with a proven track record of success.

Different ways to partner

Build a front-end for a bank

Here, you would build a tailored interface that connects with a bank’s existing lending systems. This lets you control how customers interact with your platform, while the bank takes care of the complexity behind the scenes.

Work with a fronting bank

In this setup, the bank handles all the credit and compliance processes, and you focus on dealing with your customers. It’s a more hands-off approach, where the bank takes on more of the risk and legal responsibilities.

Use an embedded financing provider

This typically drives the most value for a marketplace. Here, you partner with a B2B financing provider with the technical expertise to create solutions you can brand as your own. They stay on to handle the technical details. You choose their level of integration, with the option to go as far as weaving their solutions seamlessly into your software. They put up all the money, manage all the risk, plus handle collections and customer service in the background.

What to consider

Technology

Depending on who you choose, their setup can be simple or more customized. The more customized a financial product is, the better its results tend to be. Some providers offer plug-and-play options with their existing financing system. But a great partner is one who goes the distance to make these options look and feel like your own native marketplace offerings.

Funding

Your partner usually brings the money, so you’re not risking your own. Your financial involvement depends on the type of partnership—some need more upfront money, others less. The best value a partner can offer in this scenario is to shoulder the risk for everyone else. That means your marketplace, plus both the buyer and seller involved in the transaction, can do business more freely.

Managing risk

External providers often have the know-how, the team and the processes in place to continuously do risk assessments. True expertise in risk assessment is pivotal when you offer financing based on data points that signal trustworthiness.

Day-to-day ops

Depending on the model, you might have very little to manage (like with a bank partner), or you might have your hands full if your partnership puts you in charge of customer support. You want an eye-level partner you can trust, one that welcomes your collaboration, challenges your thinking and doesn’t give you extra busy work.

Compliance

The provider usually deals with most of the legal compliance work, but how much you’re involved will depend on several factors, including how well-versed your partner is in navigating the process. Look for a partner with experience. They should make it crystal clear what to expect and work well with your team.

In summary: a smart choice if you prioritize time-to-market and want to avoid operational overhead.

With a good partner, when they grow, you grow. It can help you make more money in a pretty straightforward way: by charging for the financial services you are providing. Offering financing directly from your platform builds strong loyalty to your brand, which keeps customers doing business for longer.

Bringing it all together: the path forward for your marketplace

Every decision you make has a ripple effect across your business. Whether you decide to build a financing solution or partner with an external provider, what matters most is choosing a path that aligns with your goals, experience and resources.

Building a solution from the ground up gives you full control, but it also demands a significant investment of time, money, and energy. It’s a long road with plenty of risks and challenges, but for a business with enough to gain, the payoff can be worth it. On the other hand, partnering with an expert allows you to leverage proven systems, scale quickly and focus on what you do best—managing and growing your marketplace.

The right partner offers more than just technical solutions. They provide the flexibility, support, and industry expertise you need to thrive in a competitive market.

How finmid fits in the picture

A legitimate innovation should make things easier, not harder. That’s why, as an embedded financing partner, we help where it matters most: keeping the cash flowing on our partners’ platforms. We view flexible payment terms and instant payouts as table stakes for providers, who can and should offer much, much more. We create tailored financing solutions for your platform that are easy to use, grow with your business, and work as a powerful branding tool to drive customer loyalty.

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  Broad geographic coverageEffortlessly scale with our global reach in 40 countries and 35 currencies.

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  Flexible credit limitsOur limits expand in sync with you and your partner’s growth plans.

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  Seamless integrationOur solution integrates with your branding to foster customer trust.

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  Quick time to marketGet started within 48 hours post contract signature. No code required.

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  Instant buyer onboardingHigh acceptance rates and no additional document reviews or buyer involvement.

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  Instant paymentsGet instant payouts of any kind — from bank transfers to direct debits.

What’s next:

This is the first of a three-part series on marketplace financing solutions. Stay tuned for more insights. If you’re ready to explore how finmid can help your marketplace thrive, don’t hesitate to reach out.