Introducing Defacto Core: Lending-as-a-Service built for lenders to better serve SMBs

Since day one, our mission at Defacto has been consistent: Power SMB growth with better access to financing.

Why? The lending landscape is overdue for innovation. And SMBs deserve better:

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We started with our embedded API for partners, enabling trusted fintech and marketplace platforms including Qonto, Pennylane and Malt to offer seamless financing directly to small businesses. This lets us quickly deliver value to SMBs while improving our scoring algorithms on large volumes of data.

Next, we redesigned the SMB lending experience with our self-service direct lending dashboard. Built on AI-driven loan servicing, it not only provides faster, fairer access to capital but also ensures leaner, more efficient internal operations. 

To date, we’ve financed more than €600 million to 10,000 SMBs in five countries—with just one customer care agent. 

And today, we’re excited to unveil the next evolution in small business lending— Defacto Core.  

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Defacto Core: A fast, delightful & efficient choice for lenders

We’ve taken our proven expertise in real-time underwriting and paired it with our beloved SMB lending experience. This is a customizable, white-labelled Lending-as-a-Service platform specifically for financial institutions. 

The challenge for banks and traditional lenders in serving SMBs has been balancing cost-efficiency and customer satisfaction at scale. 

Defacto Core addresses both head-on by equipping FIs with instant funding decisions and a self-service infrastructure that simultaneously upgrades the borrower experience while decreasing the cost to serve.
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Our platform sits on top of a lender’s tech stack and can be used as a standalone experience, or integrated seamlessly via APIs. Either way, our interface is white-labeled to ensure the lender can maintain and reinforce their brand equity. 

We’ve rebuilt the entire SMB lending value chain from customer acquisition to internal control. Lenders have complete flexibility to select which steps and lending products they’d like to optimize with our platform. Whether it’s automating underwriting, streamlining credit decisions, or providing personalized refinancing options, our modular system adapts to meet their specific needs.

Defacto Core isn't meant to replace a bank's core SMB lending operations—it's an engine upgrade that enhances them with native AI-powered loan servicing. Ultimately it empowers financial institutions to serve SMBs faster, more smoothly, and with greater efficiency—thus ultimately unlocking more SMB financing.

Speaking the same banking language 

As a fintech, we're not just another tech disruptor—we’re part of the regulated ecosystem. Obtaining our financing company license from the ACPR was a pivotal move in our journey to support banks and financial institutions. 

Being fully licensed lets us speak the same language as traditional lenders, ensuring we meet the high compliance standards they’re accustomed to. This decision was driven by our understanding that, in the business of risk, owning our compliance processes end-to-end is essential. Not only can we deliver a seamless and secure experience to our customers, it creates more robust and trustworthy partnerships with regulated institutions.

We at Defacto wear two hats. One as an agile tech startup, constantly innovating to improve operational efficiency and the user experience. The other as a risk-conscious financial institution, committed to meeting the rigorous regulatory standards that govern the industry. 

By balancing these roles, we’re uniquely positioned to bridge the gap between fintech agility and the trust traditional lenders require.

Why now is the moment for embedded lending

The time for embedded lending isn’t just ripe—it’s overdue. In France alone, the €700 billion addressable SME market remains largely untapped, with only 40% served by factoring companies and traditional banks. The European market is estimated to be approximately five times larger again.

Embedded finance is no longer just a trend; it's the future of banking, projected to explode into a $7.2 trillion market by 2030. 

The demand is there, the technology is ready, and the regulatory environment has paved the way for a new era in lending.

1. Europe’s banking infrastructure is ready 

Europe is uniquely positioned to spearhead the embedded lending revolution. The continent’s regulatory framework, driven by initiatives like PSD2 and the upcoming PSD3, has made open finance the new norm. 

Seamless data sharing between banks, fintechs, and third-party providers is now possible. E-invoicing and others are breaking down barriers and allowing new, more efficient financial services to thrive. This regulatory backing isn’t just fueling innovation; it’s setting the stage for embedded lending to scale across Europe.

While the U.S. might lead in venture capital availability, Europe’s adoption of digital payments—accounting for 78% of all transactions—gives it a significant edge in embedding financial services directly into the digital experiences that consumers and businesses use daily.

2. Tech is ready: AI and instant payments are catalysts

Generative AI and machine learning are transforming the way financial institutions operate. With AI-driven insights, lenders can perform more accurate risk assessments, enabling faster, more personalized lending solutions that scale efficiently. The technology is here—it’s already making loan servicing smarter, leaner, and more responsive to market demands.

Europe’s banking infrastructure is also primed for transformation, with systems like SEPA Instant Credit Transfer enabling real-time cross-border payments. This is a game-changer for embedded lending. Funds flow instantly once credit decisions are made, delivering a frictionless experience for SMBs.

3. Customers are ready and demand seamless as the status quo

Today’s consumers and SMBs demand more from their financial services. They expect seamless, embedded experiences integrated into the platforms they already use—whether it’s e-commerce, accounting software, or marketplace platforms. This shift has forced banks to rethink their strategies, focusing on user experience, cost efficiency, and scale.

As SMBs increasingly digitize their operations, they’re trusting financial software to manage day-to-day needs. Embedded lending fits perfectly into this ecosystem, offering financing solutions at the moment they’re needed most—without the friction of traditional processes.

The convergence of regulatory shifts, technological advances, and evolving customer behavior has created the perfect storm for embedded lending to thrive in Europe. 

And with Defacto Core, lenders now have the tools to unlock the full potential of this booming market.

Mille mercis

This is a truly exciting time for us at Defacto, and we have many people to thank for making this possible.

First, our amazing customers and partners—your trust and collaboration have been the backbone of our success. Together we've built a platform that merges the best of fintech and traditional banking. 

I also want to extend my deepest gratitude to our incredible team. We’re a small but mighty group of just 25 people (plus 5 AI copilots). Together, we’ve served over 10,000 clients and pushed the boundaries of what’s possible in SMB lending.

We’re just getting started, and we couldn’t be more excited for what’s ahead. 🚀