YouLend, an embedded finance provider that delivers revenue-based lending through partners including Amazon and eBay, has secured a financing facility from Castlelake to develop its US operations.
The facility enables YouLend to extend up to US$1bn in revenue-based financing to US small and medium enterprises over three years.
Castlelake, a global alternative investment firm specialising in asset-based private credit, previously invested in YouLend’s UK operations through a private securitisation transaction in 2023.
The new agreement strengthens a multi-year relationship between the firms across multiple European territories.
Market Development
The agreement follows YouLend’s entry into partnerships with Etsy, the e-commerce marketplace for handmade goods, FreshBooks, the cloud accounting platform, and Paysafe, the payments provider.
These relationships enable financing options to be embedded within established digital platforms.
Revenue-based financing, where repayments flex with a business’s income rather than following fixed schedules, serves as an alternative to traditional bank lending for small enterprises.
YouLend’s artificial intelligence-driven credit assessment system maintains a 90% approval rate for applicants.
The company operates through an application programming interface that allows partners to offer branded financing products to their merchant customers without developing internal lending infrastructure.
This technology integration enables rapid deployment across multiple e-commerce and payment platforms, including Shopify.
Platform Growth
YouLend reports it has provided financing to 200,000 small businesses globally, with partners indicating these companies experience a 26% increase in sales within six months of receiving funding.
The platform’s total lending through partnerships has contributed US$10bn to gross domestic product across its markets.
The facility marks a significant step in YouLend’s US market presence, following recent partnership announcements with major e-commerce and financial services providers.
These relationships allow merchants to access financing through their existing business service providers, streamlining the capital access process.
Implementation
The platform’s software and APIs enable partners to extend their value proposition by offering flexible financing products in their desired branding to their merchant base. Partners can implement the system without additional code development or capital requirements.
Anders Torpe Christoffersen, Chief Financial Officer at YouLend, says: “The United States is a critical priority for us. By increasing capital capacity and adding more diversification to our investor base, we believe we can better help small and medium sized businesses access the capital they need to thrive.”
The agreement represents an extension of YouLend’s embedded finance model, which has processed thousands of successful funding instances across nine territories in the UK, EU and US.
This approach integrates lending capabilities directly into the platforms where merchants conduct their daily business operations.
Alex Curcio, partner for specialty finance at Castlelake, adds: “We believe the global SMB finance sector offers interesting asset-based investment opportunities for institutional investors and that private credit solutions are playing an increasingly important role in meeting the demand for capital from SMBs.”