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One of the quiet truths in small business lending is that timing matters as much as pricing . Access to capital is often most valuable not months after a business is formed, but at the very moment paperwork is signed, entities are created, and founders begin spending money to operate. That’s the context behind a new partnership between Sage  and Lendio , which will embed small business financing options directly into Sage’s Wyoming LLC attorney platform. Rather than sending new business owners off to search for funding on their own, the partnership places financing alongside legal formation, where it naturally belongs. Financing at the Moment of Incorporation Under the partnership, business owners forming an LLC through Sage’s platform will be able to access Lendio’s financing marketplace directly within the experience. That includes exposure to multiple lending options without needing to leave the platform or restart the application process elsewhere. This approach reflects a growing belief in fintech: capital should appear where decisions are being made , not after the fact. For a newly formed business, early expenses—legal fees, licenses, equipment, marketing, software, initial inventory—often arrive before revenue does. Embedding financing at this stage shortens the gap between need and access. Why Wyoming Matters in This Equation Wyoming has become a popular jurisdiction for LLC formation due to its business-friendly laws, privacy protections, and streamlined administrative requirements. Many entrepreneurs, especially those forming holding companies, online businesses, or asset-owning entities, start there. By embedding financing into a Wyoming-focused formation platform, Sage and Lendio are targeting founders who are often: Early-stage but intentional about structure Operating digitally or across state lines Looking for speed and simplicity That makes embedded lending a natural fit. These founders are already making operational decisions; introducing capital options at that moment reduces friction. Lendio’s Role: Distribution, Not Just Origination For Lendio, this partnership is less about creating a new loan product and more about a distribution strategy . Instead of competing for borrower attention through ads or outbound outreach, Lendio integrates directly into a workflow founders are already using. That allows financing to be contextual, presented as an option, not a pitch. This model also reflects how lending marketplaces are evolving. Rather than acting solely as destinations, they’re increasingly becoming infrastructure layers  that plug into software, legal, accounting, and payments platforms. Embedded Lending Keeps Expanding Its Footprint Zooming out, this partnership fits squarely into a broader trend across business finance: lending is becoming embedded wherever businesses operate . Over the past several years, financing has moved into: Accounting and bookkeeping software Payment processors and POS systems E-commerce platforms and marketplaces Payroll and HR tools Legal and entity formation platforms are a logical next step. Formation is one of the first structured interactions a business has with professional services, and often one of the first points where capital is required. Rather than treating financing as a separate journey, embedded models collapse multiple steps into one experience. A Subtle but Important Shift What makes this partnership notable isn’t scale or loan volume, at least not yet. It’s the placement  of financing within the business lifecycle. By meeting entrepreneurs at the moment they formalize their business, Sage and Lendio are aligning capital with intent. That alignment tends to produce better outcomes: more informed borrowing, earlier planning, and fewer last-minute scrambles for liquidity.

A major policy shift is coming to the SBA’s flagship lending programs, and it’s already sparking intense debate across the small business and political landscape. According to a new SBA policy notice, effective March 1, 2026 , the agency will no longer guarantee SBA-backed loans  for businesses that have any direct or indirect ownership by non-U.S. citizens , including lawful permanent residents (green card holders) . The updated rule requires 100% of all owners  to be U.S. citizens or U.S. nationals , with their principal residence in the United States (or its territories/possessions) . This change applies to the SBA’s two most commonly used programs for acquisition, expansion, working capital, refinancing, and real estate projects: 7(a)  and CDC/504 . What exactly changed? Over the last several months, SBA eligibility rules around citizenship and ownership have moved quickly: In prior guidance, SBA rules generally allowed eligibility when ownership met certain thresholds that included lawful permanent residents. In late 2025, SBA guidance had briefly allowed a limited amount of non-qualifying ownership (widely reported as up to 5%  in certain cases). The newest policy rescinds that direction and now excludes lawful permanent residents entirely , requiring 100% U.S. citizen/U.S. national ownership . From an underwriting and deal-structuring standpoint, the “direct and indirect owners” language is important: it implies SBA will look through cap tables and ownership chains, not just the names on the borrower entity’s operating agreement. The argument for the change (how supporters frame it) Because this is politically charged, it helps to separate the policy rationale from the rhetoric. Supporters of the tighter rule tend to emphasize three themes: 1) “Taxpayer-backed guarantees should prioritize citizens” The SBA’s programs don’t usually lend directly; they guarantee loans made by banks and other lenders , which is effectively a federal credit enhancement. Supporters argue that if the federal government is standing behind loans, it’s reasonable to prioritize businesses fully owned by citizens/nationals. 2) A simple rule is easier to enforce A bright-line standard (100% citizen/national ownership) is easier for lenders and regulators to apply than nuanced thresholds and exceptions, especially when ownership structures can be complex. 3) Broader immigration and enforcement alignment The SBA has said this update aligns with a Trump administration executive order framework referenced in SBA documentation and coverage, and it fits within a broader push toward stricter eligibility for federal benefits and programs. From a Republican perspective, those points typically land as “protect the integrity of federal programs” and “keep incentives aligned with citizenship.” From some Democrats in more enforcement-oriented districts, the “clarity and enforceability” argument can also resonate, even if they disagree with the breadth of the exclusion. The argument against the change (how critics frame it) Opponents aren’t just making a moral argument; many are making an economic one. 1) Lawful permanent residents are legal, tax-paying business owners Green card holders are authorized to live and work in the U.S. and often build multi-year local roots. Critics argue it’s inconsistent to treat them as eligible to build businesses, hire workers, and pay taxes—but ineligible for one of the most important small business credit programs. 2) Immigrant entrepreneurship is a meaningful driver of job creation Business advocacy groups and multiple reports emphasize that immigrants start businesses at high rates and contribute significantly to local employment and economic activity. Critics say excluding lawful permanent residents could suppress job creation—ironically conflicting with the stated goal of expanding it. 3) It hits “mixed-ownership reality” in the real world Many legitimate small businesses have ownership structures that include: a spouse with different citizenship status a minority investor who is a lawful permanent resident employee equity participation family partnerships across status lines Under the new rule, even small percentages  can trigger ineligibility, based on reporting and analysis. From a Democratic perspective, the strongest critique is often that this is a sweeping exclusion of legal residents that will disproportionately impact immigrant-heavy communities and industries. From some pro-business Republicans and industry stakeholders, the critique is more practical: “this blocks credit to job creators who are already here legally.” Where this likely goes next The political fight over this won’t be quiet. There’s already public opposition from advocacy organizations and Democratic lawmakers, and broader coverage suggests this could become part of a larger election-cycle economic narrative: who gets access to capital, and on what terms. Even if the rule stays in place, it may spur: lender-side tightening in documentation around ownership and residency more borrowers steering away from SBA timelines altogether increased demand for alternative credit products for impacted founders

As 2026 begins, the latest quarterly snapshot of American small business financial health, the Q4 2025 Small Business Cash Flow Trend Report  from OnDeck and Ocrolus, paints a picture of resilience, optimism, and structural evolution  in how Main Street accesses capital and manages liquidity. The report, based on survey responses from nearly 470 small business borrowers and cash flow insights from over 3.4 million applicants, shows that while challenges linger, the strategies small businesses use to navigate them are evolving meaningfully. Credit Access: Banks Continue to Lose Ground Perhaps the most enduring theme across recent quarters, and one that continues into Q4, is the shift away from traditional bank credit toward non-bank and fintech lenders . Nearly 74% of small businesses bypassed a traditional bank when seeking financing , a number consistent with patterns observed throughout 2024 and 2025. What’s notable about this trend is its persistence: even when credit demand is strong, banks are often unable or unwilling to meet it. Traditional banks’ shrinking share of debt inflows stands in contrast to non-bank lending activity, which continues to provide a reliable source of liquidity. Industry-level cash flow data shows non-bank loan volumes rising steadily year-over-year and quarter-over-quarter , while bank loan inflows were up year-over-year but declined sequentially, underscoring how fintech and alternative lenders are filling gaps left by more cautious bank underwriting. For businesses, especially those in sectors like Accommodation & Food Services, Construction, and Professional Services, this means capital is more likely to be sourced from agile and technology-driven lenders than from traditional institutions.

(Free exclusive content for site members only) Executive Summary The alternative business funding industry closed 2025 in a position of strength, capturing unprecedented market share as traditional banks continued their multi-year retreat from small business lending. Three defining trends shaped the year:

Key points from the Credit Suite Bankruptcy case If you know what Credit Suite does and how well-known Ty Crandall is for offering services related to business credit and financing, then the irony of their bankruptcy filing is off the charts. I am not here to pound on the situation that they have found themselves in, but there are three key points to this case and its coverage that I want to point out. Point 1 From the outside, as a business owner or broker seeking to become more educated in the services and content Credit Suite and Ty Crandall offer, you would never know its business was struggling financially. They are a constant on many different platforms online, including Meta, YouTube, and LinkedIn. To have filed for bankruptcy due to its own financing using various credit products, it provides another example of how things can go wrong in any type of business when it's least expected.  Who is Ty Crandall “Ty Crandall is an internationally known speaker, author, and business credit expert. With over 17 years of financial experience, Ty is recognized as an authority in business credit building, business credit scoring and business financing." "He is also the author of two of the bestselling books on consumer and business credit. These include “Perfect Credit” and “Business Credit Decoded." "He has been featured in Forbes, Entrepreneur and Inc. He currently serves as the CEO at Credit Suite.” Point 2 - Biased slant against MCAs (not a loan) The reporter for the Tampa Bay Business Journal uses MCA Loan in the headline, yet over a dozen other creditors are listed in court records. Dunn and Bradstreet is listed as being owed just over $650k by itself. The MCAs, now more frequently called Revenue Based Financing (RBF), named in the TBBJ article are CFG Merchant Solutions and Capchase, which is not the traditional MCA or RBF company. Court documents also list Fox Business Funding. Total owed to those three is over $446k, less than Dunn and Bradstreet. Other creditors include Fundbox, which offers a Business Line of Credit, American Express, Capital One, Citicards, Brex, BayFirst National Bank, Divvy Card, and Hubspot ( see image below for amounts ). My opinion is that the reasoning the writer takes this position on MCAs is that she has a continuing article series anytime a business runs into bankruptcy while they have taken out one or more MCAs. In that series, she continues to incorrectly call it an “mca loan”, as a lot of media does, but a merchant cash advance is not a loan. She also uses the phrasing of “ high-interest-rate MCA loans”, which is also incorrect, and it has been decided in court many times that there is no interest since it's not a loan. Then she describes two of the creditors as MCA 'lenders’ when the correct terminology would be MCA 'funders'. These errors matter, whether writing about or offering the product. The perceived biases against the MCA product, also known as sales-based financing in commercial finance laws, are clear to me here because the article does not cover the positive effects that tens of billions of dollars per year in funding contribute to SMBs nationally and much more globally. Click to enlarge Click to enlarge Point 3 - The focus on credit but not paying back Ty Crandall and many other business credit or finance content creators focus much of their time on the front side of getting funding and make it seem easy it is to build business credit and get financing if you take the right steps. Rarely do they focus on how to pay or make sure you can pay everything back. I have seen it with the zero-interest credit card stacking , where many even hide the costs associated with liquidating the cards for cash, and then some use deceptive business practices. The FTC recently banned Seek Capital and its owner, Roy Ferman, from business financing and credit repair services because of deceiving small businesses calculated at $37 million.   So just like in any funding, the easy part is sending out the cash. The hard part is collecting. In other words, anyone can fund, but not everyone can collect. And in this case, one of the people who has a business that teaches people all the right business credit and financing things to do, got too far into debt that they had to file Chapter 11.

The most valuable digital bank in the world has officially planted its flag on American soil. In a regulatory milestone that signals a massive shift in the global fintech hierarchy, Nu  (the parent company of the new entity Nubank ) has received conditional approval  from the Office of the Comptroller of the Currency (OCC) for a U.S. national bank charter. For years, Nu has been the dominant force in Latin America, banking over 100 million customers in Brazil, Mexico, and Colombia. Now, they are coming for the U.S. market—and unlike most fintechs, they aren't renting someone else's license. They are building their own bank. The "Golden Ticket" Why does this charter matter? Because in the U.S., a national bank charter is the ultimate "moat." Most U.S. fintechs (Chime, Current, etc.) operate as middleware; they build a fancy app but rely on a partner bank (like Bancorp or Stride) to hold the deposits and move the money. This is expensive and operationally limiting. With a national charter, Nu can: Lower Costs:  Hold its own deposits directly, drastically reducing its cost of funds. Lend Directly:  Underwrite loans across state lines without navigating a patchwork of 50 different state regulators. Export the Model:  Replicate its low-cost, high-efficiency operating model (Nu’s cost to serve a customer is roughly $1, vs. $50+ for a traditional bank) in the world's largest economy. The "Conditional" Caveat The "Conditional" tag means Nu isn't open for business tomorrow. They still have to meet specific capital requirements, build out compliance teams, and pass final operational checks before the OCC hands over the keys. This is a standard part of the de novo bank process (similar to what Varo and SoFi went through). The Sleeping Giant Wakes Up US neobanks should be nervous. Nu has something they don't: Profitability at scale. While many US competitors are still burning cash to acquire users, Nu is a profit machine in Brazil. They have the war chest to play the long game in the US. If they can translate their "fanatical" customer loyalty from São Paulo to San Francisco, the US banking oligopoly is about to face one of its most dangerous challengers yet.

New York, NY  -  VOX Funding , a leading fintech provider of fast and flexible capital solutions for small and mid-sized businesses, has partnered with  Cloudsquare , the premier Salesforce-native alternative business lending CRM for brokers. Together, the companies are introducing a next-generation, API-powered funding workflow designed to eliminate manual handoffs and accelerate deal flow across the entire broker ecosystem. This integration enables real-time submissions, faster approvals, and cleaner funding processes - reducing reliance on email communication and eliminating delays caused by traditional back-and-forth exchanges. A Seamless, Fully Connected Lending Experience Through this partnership, VOX Funding has expanded the reach of its SYNQ API by integrating directly with Cloudsquare’s Salesforce-powered platform. ISOs using Cloudsquare can now submit deals to VOX instantly, enabling a smoother and more transparent process from initial application through final approval. Brokers and merchants gain true end-to-end visibility into the funding journey, including offers, documents, stipulations, and real-time status updates, all within the systems they already use. “Too many brokers who submit to VOX are limited by CRMs that cannot support API submissions, and building their own integration is not realistic for most teams,” said Jeffrey Morgenstein, Co-Founder and CEO of Cloudsquare. “This partnership creates a seamless upgrade path so brokers can transition to Cloudsquare and work with VOX more efficiently, with improved speed and total transparency.” Positioning VOX for Scalable Growth For VOX Funding, this integration represents a major leap forward in scalability and partner enablement. By reducing manual touchpoints and automating key workflow steps, VOX can serve its broker network with greater speed, accuracy, and operational efficiency. “Our mission is to make capital access fast, flexible, and tailored to the unique needs of every business,”  said Louis Calderone, Co-Founder and President of VOX Funding.  “Cloudsquare’s API-driven platform brings speed and transparency, allowing us - and our partners - to work smarter and deliver better outcomes for the clients who rely on us.” About VOX Funding VOX Funding delivers fast, flexible, and creative capital solutions for small- and medium-sized businesses. By tailoring funding to each business’s needs — often within 24 hours — VOX helps merchants seize opportunities, expand operations, and achieve sustainable growth without delay. www.voxfunding.com About Cloudsquare Cloudsquare is the leading end-to-end lending platform, uniquely powered by Salesforce, to deliver unparalleled flexibility and innovation for lenders and brokers. With a commitment to optimizing lending processes through cutting-edge technology, Cloudsquare provides robust, scalable solutions that empower clients to achieve greater efficiency and growth. Celebrated by industry leaders, Cloudsquare has earned a place on the Inc. 5000 list as one of America’s fastest-growing companies and is consistently rated a top service provider on platforms like Salesforce AppExchange, G2, Clutch, and Manifest. www.cloudsquare.io

In the world of asset-based lending, there is a golden rule: Collateral is King.  Lenders sleep well at night, believing that if a borrower defaults, the inventory and accounts receivable (AR) are there to cover the loss. But what happens when the inventory is pledged to three different banks? What happens when the accounts receivable are completely made up? This week, the Department of Justice unsealed an indictment that answers those questions with terrifying clarity. Patrick James , the former CEO of First Brands Group  (parent company of Fram, Autolite, and Trico), and his brother Edward James  have been charged with orchestrating a massive, multibillion-dollar fraud scheme. The fallout has been nuclear. It hasn't just bankrupt an auto parts giant with $9 billion in debt; it has now claimed its first major fintech casualty: Raistone . The Scheme: "Growth" at Any Cost According to the Southern District of New York (SDNY), First Brands wasn't just a struggling company; it was a financial mirage. Prosecutors allege that starting around 2018, the James brothers ran the company like a Ponzi scheme to fuel an aggressive acquisition spree. To buy iconic brands like Fram and Autolite, they needed massive amounts of debt. To get that debt, they needed to show massive assets. The "Fake Invoice" Factory The indictment details a brazen operation where executives allegedly: Fabricated Invoices:  They created fake accounts receivable from customers that didn't exist or for sales that never happened. Double-Pledging:  They allegedly pledged the same  inventory and receivables to multiple lenders simultaneously. Bank A thought they had a first lien on the wiper blades; so did Bank B and Bank C. The "Round Trip":  To make the fake sales look real, they would allegedly route money through shell companies to "pay" the fake invoices, tricking auditors into thinking cash was flowing. The motive? The DOJ claims the brothers siphoned millions from the fraud to fund a lifestyle of private jets, luxury homes, and personal chefs, all while the company was rotting from the inside. The Fintech Casualty: Raistone While the banks will take a hit, the fraud has been fatal for Raistone , a New York-based supply chain finance fintech. Raistone’s business model was to connect investors with corporate receivables, essentially letting investors fund a company’s invoices for a return. Unfortunately, First Brands accounted for roughly 80% of Raistone's revenue. When First Brands filed for bankruptcy in September 2025, it revealed a "black hole" in its balance sheet. Raistone, which had originated hundreds of millions of dollars in financing based on First Brands' receivables, was left holding the bag. The End of the Road Reports confirm that Raistone is now closing its doors after a failed attempt to sell the business to Marblegate Asset Management. The collapse is a brutal lesson in concentration risk . No matter how good your technology is, if 80% of your volume sits with one borrower, and that borrower is a fraud, your platform is doomed.

Canadian business financing doesn’t usually generate splashy headlines. It’s traditionally conservative, bank-led, and built around long-standing underwriting models that prioritize stability over speed. That’s why Float’s announcement that it has secured close to $100 million in funding  stands out. This raise isn’t just about growth capital, it’s about momentum in a market that has historically moved cautiously when it comes to fintech-led business funding. A Different Kind of Capital Raise Float’s funding combines equity and credit capacity designed to unlock more than $1.5 billion in spending power  for Canadian businesses. Rather than positioning itself as a traditional lender, Float operates at the intersection of spend management software, corporate cards, and embedded credit. The distinction matters. Instead of asking businesses to apply for loans during moments of stress, Float embeds access to capital directly into the tools companies already use to manage expenses and cash flow. That model shifts financing from a reactive event to an operational feature. Why Canada Is Ready for This Model Compared to the U.S., Canada’s business funding ecosystem has fewer large-scale fintech lenders and a heavier reliance on major banks. While that has provided stability, it has also limited flexibility for fast-growing or digitally native companies. Over the last few years, that gap has become more visible. Canadian businesses increasingly operate globally, rely on cloud-based tools, and expect faster financial decisioning. Float’s rise reflects that shift, offering a platform that complements existing bank relationships rather than replacing them. This “layer on top” approach has proven effective in other markets, and Float appears to be executing it with a distinctly Canadian sensibility. Spending Power Over Loan Size One of the more telling details in Float’s announcement is how it frames impact. Instead of emphasizing loan balances or credit limits, the company highlights usable spending power . That framing aligns with how businesses actually operate. Most companies don’t think in terms of borrowing—they think in terms of whether they can pay vendors, manage payroll timing, and fund growth without friction. By focusing on day-to-day liquidity rather than one-time financing events, Float positions itself closer to operations than to traditional lending. A Broader Signal in Canadian Fintech Float’s funding round also points to a broader trend: capital providers are increasingly willing to back Canadian fintechs that blend software and finance into a single product experience. While banks will remain central to business lending in Canada, platforms like Float suggest that the next phase of growth will come from tools that make capital feel less like a transaction and more like infrastructure.

The federal government's years-long campaign to root out pandemic relief fraud is far from over. In fact, prosecutors are still systematically dismantling complex schemes that were set in motion back in 2020. The latest entry in the Funder Intel Fraud Tracker  comes from the District of New Jersey, where a couple has been indicted for allegedly fabricating entire businesses to siphon off EIDL and PPP funds. The Case File Defendants:  Sabrina Mitlo, 41, and Joseph Mitlo, 40, both formerly of Piscataway, NJ Charges:  Wire fraud, conspiracy to commit wire fraud, and money laundering. The Scheme (Alleged): This wasn't a case of an existing business padding its payroll numbers. According to the indictment, the scheme was built on a foundation of complete fabrication: Fake Entities:  The couple allegedly created non-existent businesses for the sole purpose of applying for relief funds. Falsified Docs:  To make these shell companies look legitimate to lenders and the SBA, they allegedly submitted fake federal tax filings and payroll records. The Cash Grab:  Through these fraudulent applications, they successfully secured Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans. The Spending:  Instead of supporting business operations, the funds were allegedly laundered and used for personal expenses, including a down payment on a home. Loan Fraud Context This case highlights a key theme in the DOJ's ongoing enforcement strategy: The statute of limitations is long, and the data trail is eternal. The initial wave of prosecutions focused on low-hanging fruit: individuals who bought Lamborghinis and homes with PPP money. Now, investigators are mining years of bank records, tax filings, and IP addresses to build cases against more sophisticated, document-heavy schemes. The message from U.S. Attorney Philip R. Sellinger's office is clear: just because the programs have closed doesn't mean the investigation has.

As Washington once again flirts with a potential government shutdown, small business owners, brokers, and lenders are asking a familiar question: Will SBA loans be affected? According to a recent NPR report , Senate Democrats are preparing to vote against a Department of Homeland Security (DHS) funding bill, setting the stage for a possible partial federal government shutdown  if lawmakers fail to reach a broader agreement. While DHS is the focal point of the standoff, the downstream impact could reach far beyond border security and into small business finance . Understanding This Shutdown Scenario The keyword in this situation is partial . A partial shutdown occurs when Congress fails to fund certain federal agencies, while others continue operating under existing appropriations or mandatory funding. DHS would be directly affected in this case, but agencies like the Small Business Administration (SBA) fall into a different category. That distinction matters. Would the SBA Shut Down? Historically, the SBA does not fully shut down  during a partial government shutdown—but its operations can slow significantly. Here’s what typically happens: SBA Loan Guarantees SBA 7(a) and 504 loan guarantees may continue , but only if the SBA has remaining authority and staff deemed “essential.” During past shutdowns, loan approvals have slowed or temporarily paused , especially once funding caps are reached. SBA Processing & Staffing Many SBA employees are furloughed during shutdowns. Fewer staff means: Slower loan approvals Delays in authorization numbers Backlogs once government reopens SBA Disaster Loans Disaster loan programs are often hit hardest , as they rely on discretionary funding. If funding lapses, new disaster loan approvals may stop entirely. What Brokers and Borrowers Should Expect Even if SBA lending doesn’t fully stop, timing becomes unpredictable . For brokers and lenders: SBA deals in progress may stall unexpectedly Closing timelines can stretch by weeks Secondary market activity may slow For small business owners: Funding delays could disrupt expansion plans Refinances may get stuck mid-process Time-sensitive acquisitions become riskier This is where alternative lending options often step in. Spillover Effects on Non-SBA Business Lending Government shutdowns tend to have a psychological impact on markets as well as a practical one. When SBA loans slow: Banks may tighten underwriting temporarily Borrowers look to non-bank lenders , revenue-based financing, and short-term products Demand for bridge capital and interim financing increases Ironically, shutdowns often lead to increased activity  in parts of the alternative lending ecosystem, even as traditional programs hesitate. The Bigger Picture: SBA Dependence on Political Stability This latest standoff highlights a recurring vulnerability in the SBA loan program: its reliance on congressional funding cycles . While SBA loans remain one of the most powerful tools for small business financing in the U.S., every shutdown reminder reinforces why: Brokers diversify product offerings Lenders build hybrid SBA + non-SBA strategies Borrowers seek faster, tech-driven alternatives In an environment where government funding battles are increasingly common, flexibility becomes a competitive advantage. Bottom Line A potential partial government shutdown tied to DHS funding would not automatically shut down SBA lending , but it could slow approvals, create uncertainty, and delay funding , especially if the standoff drags on. For anyone relying on SBA loans, the takeaway is simple: don’t wait until Washington decides . Having backup financing options and contingency plans is no longer optional; it’s part of doing business in today’s lending environment.

Last week, Affirm Holdings, Inc. submitted regulatory applications to establish a Nevada-chartered industrial loan company (ILC)  marking a major shift in the company’s financing and product ambitions. This move is part of a broader trend of fintech firms seeking charters that let them do more than point-of-sale lending , but Affirm’s play specifically could reshape how the company engages both consumers and  businesses. What Is an Industrial Loan Company (ILC)? An industrial loan company (ILC)  is a special kind of FDIC-insured bank that can be owned by non-financial companies and offers many banking services, including deposit accounts and consumer or commercial loans , under federal and state supervision. Unlike traditional banks, ILCs don’t have to become holding companies subject to Federal Reserve oversight, which makes them an attractive charter route for fintechs wanting to expand beyond their existing product stacks without taking on the full regulatory burden of a traditional bank holding company. Why Affirm Wants a Bank Charter — Beyond BNPL Through its app and merchant integrations, Affirm today offers buy-now, pay-later (BNPL) plans and installment loans at checkout, plus products like the Affirm Card and savings features (held by partner banks). But applications for Affirm Bank  signal a desire to own the whole experience  rather than rely on partner banks and third parties for deposit and lending infrastructure. Under a charter, Affirm could potentially: 1) Control the Full Capital Stack Right now, Affirm partners with FDIC-insured banks to hold savings deposits and fund loans. A charter would let it source its own deposits , which are cheaper and more stable than wholesale funding, and that, in turn, could support broader lending programs. 2) Offer Deposit Products Directly Affirm already provides savings accounts via partners, an FDIC-insured product, but with its own bank, it could potentially design tiered business savings , sweep accounts for merchants, and other yield-generating options tied directly to commercial cash flow. 3) Move Into Business Lending This is the part your audience will care about: with a bank charter, Affirm could underwrite and originate commercial loans  such as: Small business working capital loans Lines of credit for merchants and SMBs Term loans for equipment, expansion, or inventory Commercial credit cards and revolving credit products Deposits and payment accounts bundled with credit These are the very products that fintech banks like PayPal Bank  and others are eyeing as well, aiming to reduce dependence on external partners for merchant credit facilities while capturing more revenue and control over customer relationships. How This Fits Into Affirm’s Bigger Picture Affirm’s existing BNPL and installment products are consumer credit , and heavily anchored in digital commerce. But a bank charter expands the potential beyond short-term financing at checkout: A bank can: Take customer deposits  (a cheaper source of capital than partnerships) Build risk-rated lending portfolios  based on cash flow data and purchase history Offer commercial banking services  tailored to small business cash needs Think of it like Affirm layering traditional banking infrastructure under its tech-first stack, so the company doesn’t just enable payments  but actually finances operations , much like what Square (Block) and PayPal have been trying to build. What This Could Look Like in Practice Rather than a generic business loan product, Affirm could leverage its transaction and credit data at checkout  to underwrite commercial customers faster and with deeper insight. For example: A merchant whose BNPL sales trend upward might automatically qualify for a working capital line or revenue based financing. A service business with predictable cash flow could receive term financing offers  alongside Affirm payment options. Integrated insights could let Affirm launch revenue-based financing products  that fluctuate with business performance, a natural progression from installment consumer credit to commercial credit. This embedded approach, underwriting by digital behavior and cash flow signals  rather than just credit scores, is where most fintech innovation in commercial lending is heading right now. A Strategic Timing Advantage Affirm’s charter bid comes in a period where regulators are both wary of but also open to fintech evolution. BNPL regulation remains patchy in the U.S., with different state laws and little federal oversight. Owning a regulated bank, subject to FDIC and state supervision, could help Affirm navigate regulatory uncertainty and build durable lending businesses  that stand up to scrutiny. What It Doesn’t  Mean (Yet) It’s important to note: approval isn’t guaranteed . Industrial charters can take substantial time and require rigorous compliance structures. And even after approval, launching a full slate of small business products would require models, systems, and risk frameworks distinct from Affirm’s consumer offerings. Final Lookahead: Affirm 2.0 — From Payments to Platform Banking This isn’t just another fintech chasing a bank charter; it’s a strategic pivot toward platform banking , where deposit taking, underwriting, and lending sit under one roof and tie directly into merchant cash flow and consumer behavior. If successful, Affirm Bank may end up being less like a traditional business lender  and more like a data-driven commercial finance engine , one that bridges the world of embedded payments, digital credit, and small business lending in ways that today’s banks haven’t fully mastered yet .