On Tuesday, Synctera announced the first Baas industry line of credit product. Synctera is a San Francisco-based startup that helps companies build embedded financial products.
The new product enables fintech developers and established companies to quickly create lending products or embed lending services into existing offerings. CEO Peter Hazlehurst said forward-thinking companies must evolve by offering standalone embedded products.
“Consumers’ credit-related needs and preferences continue to evolve, and millions of Americans lack real access to credit,” he said. “As we work towards our vision of unlocking human potential through financial innovation, we are excited to see the impact Synctera Line of Credit can make for under-resourced consumers.”
‘The easiest way.’
As the Synctera blog explains, a line of credit is a flexible way for retail and business customers to borrow and utilize a preset amount of funds. Instead of paying interest on a full $10K loan, an SMB owner can take out just a fraction of the approved line of credit and run their day-to-day or use it on projects and expenses.
Delivered via API, the firm said Synctera Line of Credit is the easiest way for companies to offer on-demand borrowing to their customers.
Customers can replenish the line of credit with repayments and then borrow again up to the predetermined credit limit, avoiding the hassle of reapplying for a loan multiple times.
Dominik Weisserth, CPO at Synctera, said the advantages of line-of-credit show up when hard-to-predict costs appear.
“Lines of credit offer distinct advantages for borrowers dealing with hard-to-predict costs, variable income, or both,” Weisserth said. “Companies building lending products with Synctera Line of Credit get access to a critical piece of the financial infrastructure that can help them provide more value to their customers and realize more growth opportunities.”
He said line-of-credit as a service enables companies to “reimagine” lending and break down the barriers that many consumers and small businesses have historically faced when trying to access credit.
By combining Synctera Line of Credit with their customer insights, companies can launch on-demand borrowing solutions that help customers improve their quality of life and financial situation.
Alongside other BaaS products
Synctera offers example Line of Credit products for different use cases. It could enable a gig economy worker to manage expenses due to irregular income, seasonality, or market dynamics. The product could help consumers or businesses to finance projects like renovation or home remodeling where cash flow may be a problem. The option could help when payment schedules make for easier cash access during unforeseen expenses like emergency medical treatment.
The firm said innovative debt repayment products where credit lines can be used to pay off higher-interest credit cards or consumer debt.
Line of Credit further enhances Synctera’s end-to-endBaaS platform; companies building with Synctera can now offer lending services alongside FDIC-insured bank accounts, personalized debit cards, and various payment types. Synctera said it aims to help companies create stronger customer relationships, complement existing product offerings, and unlock new opportunities for revenue growth by expanding into credit products.
With Line of Credit, Synctera said it provides the required financial technology — including ledger and KYC/KYB services — as well as servicing and optional operational and compliance support.
A Synctera partner bank will serve as the lender of record, but companies that build using Line of Credit are responsible for marketing, customer service, and assigning credit limits.
Synctera was launched in 2020 to power fintech for companies to create new revenue streams and enhance value by offering financial products. With tech, compliance support, and bank partners in one end-to-end BaaS platform, Synctera said it is the fastest and easiest way to build and launch bank accounts, debit cards, lending, and more.
