Future of Embedded Lending: Pennylane and Defacto Roll Out First PDP Use Case

Pennylane and Defacto Transform SMB Cash Flow with Instant Accounts Receivable Financing

Pennylane, certified as a Partner Dematerialization Platform (PDP) in September, is strengthening its partnership with Defacto, an innovative player in B2B financing. Together, they are offering Pennylane clients a seamless financing solution accessible directly through their e-invoicing tool. With this innovation, SMBs can instantly finance their invoices as soon as they’re issued, streamlining cash flow management while ensuring compliance with new regulatory requirements.

Invoice Financing: A Critical Tool for SMB Cash Flow

Invoice financing—essentially the “refinancing of a company’s trade receivables by a financial institution”—is vital for SMBs managing substantial working capital requirements (WCR). This is especially relevant in France, where 85% of businesses report late payments (payments past their due dates)¹, creating an additional €15 billion in annual cash flow needs for SMBs².

Until now, financing options have been seen as overly complex (requiring excessive paperwork) and slow (often taking weeks for funds to arrive). Pennylane and Defacto are changing that by providing SMBs with an innovative solution for instant financing. Businesses can now quickly address WCR challenges, improve their cash flow, and seize new growth opportunities.

A Seamless, Integrated Experience

By the end of this week, Pennylane will expand its cash advance offering with a new feature: SMBs can finance their invoices directly from their Pennylane account. This makes WCR financing simple and accessible as part of the invoicing process.

Defacto’s rapid decision-making and straightforward process mark a major improvement over traditional financing solutions.

This innovation also deepens the partnership between the two companies. Over the first 11 months of 2024, Defacto has already financed €30 million in cash flow needs for Pennylane customers with Pro Accounts. This new feature is expected to significantly increase financing volumes.

Arthur Waller, CEO and Co-founder of Pennylane, explains:

“By offering an integrated financing solution, we’re making life easier for business leaders. Pennylane becomes a comprehensive financial management platform, empowering businesses to not only monitor their activity but also access financial services, including WCR financing.”

Turning Compliance into Opportunity

By 2025, all businesses will need to comply with mandatory e-invoicing regulations and adopt a certified PDP within a year. Pennylane and Defacto are transforming this regulatory challenge into a growth opportunity.

As a certified PDP since September 2024, Pennylane simplifies e-invoicing adoption while providing SMBs with easy access to cash flow financing.

With the rise of open banking and integrated financial services within PDPs, the joint “Pennylane x Defacto” solution will make accessing WCR financing faster and easier for SMBs.

Jordane Giuly, CEO and Co-founder of Defacto, adds:

“The rollout of e-invoicing, paired with innovation in WCR financing, presents a unique opportunity to meet SMBs’ funding needs. In 2024, we financed over €30 million in WCR for Pennylane customers. This new service will further enhance our ability to support SMBs directly through their PDP.”

Supporting the Backbone of the Economy

In France, a business closes every 38 minutes due to late payments and a lack of accessible financing¹. Additionally, 21% of SMB and micro-business leaders report difficulty securing short-term financing⁴.

The “Pennylane x Defacto” solution aims to change this narrative. By simplifying cash flow management and access to short-term funding, this partnership empowers SMBs to stay competitive, resilient, and growth-ready.

About Defacto

Fast, flexible financing for SMBs—powered by APIs and free from paperwork. Launched in 2021, Defacto is the first ACPR-certified B2B lending platform to deliver real-time lending decisions. In just three years, Defacto has financed over €700 million for 10,000+ SMBs across five countries with three key solutions:

• A self-service financing platform for SMBs,
• API-based financing for fintechs and marketplaces,
• A white-label Lending-as-a-Service (LaaS) infrastructure for financial institutions.

About Pennylane

Pennylane is the first platform that combines accounting production software for accountants with a financial management tool for their clients. It centralizes all financial flows in real time, improving collaboration between businesses and their accounting firms.

With Pennylane, accountants save time through automation and can focus on advisory services. Meanwhile, businesses benefit from reliable, up-to-date, actionable data to make better decisions and simplify day-to-day management. Without leaving the platform, they can manage invoices, payments, and more.

Launched in 2020, Pennylane now supports over 2,000 accounting firms and more than 120,000 businesses of all sizes.

¹ Coface – September 2024
² Payment Delays Observatory – Annual Report 2023
³ Altares – Business Failures Study, Q3 2024
⁴ Rexecode – Quarterly Barometer, Q4 2024