Embedded invoice factoring: how it works and how to know if it’s right for your marketplace

Marketplaces have the unique challenge of having to keep both sides of their ecosystem happy. You’re always looking to differentiate yourself and deliver an experience that keeps both suppliers and buyers coming back. After all, if your users aren’t satisfied, what’s stopping them from working directly with each other? 

Offering faster payments is one of the easiest ways to keep sellers engaged. Early access to cash helps them fulfil more orders and grow, something they rarely get when dealing with large corporate buyers. For your marketplace, that makes fast payouts a powerful acquisition and retention lever.

But buyers still want their usual payment terms, and advancing funds yourself can quickly drain your cash as volumes rise. That’s where a third-party financing partner helps. You can offer instant payments without disrupting your user experience – through embedded invoice factoring.

In this article, we’ll look at:

• Embedded invoice factoring: what it is and when it makes sense to implement
• What to consider when evaluating embedded invoice factoring companies
• How embedded invoice factoring works with Aria
• Why choose Aria as your embedded invoice factoring solution?
• Case study: How Aria helped Job&Talent go from 20 factoring partners to one seamless solution

Note: Want to pay your suppliers faster with embedded invoice factoring? Book a demo with our financing experts.

Embedded invoice factoring: what it is and when it makes sense to implement

To understand embedded invoice factoring, let’s first start by defining traditional factoring.

In a standard factoring setup, a business sends its invoices to a specialised, authorised factoring company – called a factor – in exchange for early payment. The factor advances a portion of the invoice amount (known as receivables) upfront and then collects payment from the buyer when the invoice is due. 

Factors can be banks, their subsidiaries, or independent financing firms, but they all tend to work the same way: slowly. Applications are manual, risk checks drag on, and they’re extremely selective about who they fund. Which means these financial institutions typically only work with large companies that have a strong credit history and are processing large volumes.

For a marketplace that wants to offer financing to sellers, traditional factors can cause frustration and hassle. Your users would need to go through a separate process with the bank. They also face a high chance of rejection, since most marketplace sellers are SMEs and small businesses, not large enterprises.

Embedded invoice financing tackles those headaches head-on. It still works on the same principle – a third party fronts the cash and manages collections – but the magic is where it happens: right inside your own digital platform.

 

Sellers can request financing on the invoices they choose, get approved, and get paid all without ever leaving your marketplace. Behind the scenes, automation handles the heavy lifting: identity checks, risk assessments, even recommended credit limits. Because everything runs on tech instead of paperwork, embedded finance can approve more users, move faster, and keep the whole experience friction-free. Since it’s not through a traditional factor, the suppliers are able to actually access financing.

When does it make sense to implement embedded invoice factoring?

Embedded invoice factoring closes the gap between how sellers want to get paid and how buyers actually pay. It’s especially useful when smaller suppliers are invoicing big corporate customers: the ones that stick to their 30-, 60-, even 90-day terms and aren’t about to change their internal processes for anyone.

 

It also makes sense to implement embedded invoice factoring if you’re struggling with:

• Cash strain: Advancing payments yourself is tying up too much working capital and leaving less room to grow.
• Compliance and risk management: KYB/KYC checks, risk reviews, and regulatory requirements get harder to manage as volumes rise.
• Scalability limits: Your in-house tools can’t keep up with new markets, currencies, or faster payout expectations.

On the technical side, embedded invoice factoring works best when your platform already handles invoices digitally. Since the solution plugs directly into your software, invoices flow automatically, cutting costs, reducing manual work, and keeping operations smooth.

What to consider when evaluating embedded invoice factoring companies

Every embedded invoice factoring provider works a little differently, so it’s worth asking the right questions from the start. That’s how you figure out which one actually fits your product and your users.

1. Who takes on the credit risk?

Lending money always comes with risk, specifically the possibility that the buyer won’t pay. When evaluating a financing provider or lender, you’ll want to clarify who is responsible if a buyer defaults.

Some providers advance funds to the supplier but place the risk on them. In this scenario, if a buyer doesn’t pay, the provider comes back to the supplier to reclaim the funds.

Other companies take on the risk themselves. They handle any defaults, disputes, and collections, protecting both the supplier and the marketplace. With this approach, sellers get paid early, and you don’t have to worry about chasing payments or dealing with buyer defaults. 

2. How does the provider balance risk assessment with speed?

Early payments only work if they’re safe. You don’t want to approve high-risk buyers or send money to the wrong sellers, so strong identity and risk checks are essential.

These typically include:

• KYC/KYB identity verification
• Credit scoring
• Fraud risk analysis
• Compliance checks

The challenge is speed: traditional providers are slow because everything is manual, while some newer ones move fast by cutting corners.

 

The best partners use automation to run these checks quickly and thoroughly in the background, keeping your marketplace protected without slowing down payouts. When comparing providers, look for one that balances both security and speed.

When evaluating a provider, it’s worth asking how they strike this balance. You want both security and speed, not one at the expense of the other.

3. How customisable is the solution?

Your marketplace already has software and workflows tailored to your unique business model. The last thing you want is an embedded invoice factoring solution that forces you to rebuild everything or disrupts the experience your users know and expect.

When evaluating providers, consider how customisable their solution is. Some questions to ask include:

• Integration and flexibility: How easily does the solution fit into your existing platform? Can you start small, test it with a few users, and then scale up to a full integration?
• Fee structure (pricing): Are fees negotiable? Do you have the option to pass costs on to your sellers if needed?
• Support and responsiveness: Will you get a dedicated contact who understands your marketplace, or will you be bounced around between generic support channels?
• Functionality: Does the solution offer the specific features and capabilities your marketplace needs to serve your users effectively?

In the end, the right provider is one that can adapt to your needs and offer real, hands-on support. That’s what makes adoption easier and keeps the customer experience positive for both you and your users.

4. Can it scale with you as you expand?

If you want to offer financing on a larger scale, you need a partner with sufficient funding capacity. And if your marketplace plans to expand into new markets, you need support for multiple currencies, cross-border payments, and different payment methods.

When evaluating providers, consider their track record. What is their funding capacity, and how many invoices have they funded? What size companies do they typically work with? How many countries and currencies do they currently support? Could they handle a sudden spike in transactions?

It’s also worth asking about their willingness to grow with you. For example, if you plan to enter a market they don’t currently cover, are they open to developing new capabilities? You want to work with an embedded invoice factoring company that can evolve with you, no matter how quickly your business grows.

How embedded invoice factoring works with Aria

At Aria, our mission is to transform B2B payment experiences by enabling faster payments for suppliers. Our solution is designed to help B2B marketplaces and platforms streamline payments and offer invoice factoring. Embedded via API, we integrate directly into your platform, so you can offer same-day payments to suppliers.

Traditional providers often turn small suppliers away, but with Aria you can finance them no matter how small they are because Aria underwrites the buyer, not the supplier. Combined with our automation, you’re able to finance many small supplier invoices at scale.

With Aria, you don’t need to use your funds to pay sellers faster. Our €2 billion financing capacity enables you to offer instant payouts to your customer base today and in the future as you grow.

Here’s how it works:

1. Buyers and sellers sign up and onboard right in your marketplace – no redirects or separate applications.
2. We automatically conduct KYC/KYB verifications, credit checks, and risk assessments. Thanks to our technology, we’ve been able to provide instant decisions for 92% of applications and requests.
3. Sellers submit invoices through your marketplace as they normally would. Invoices flow to Aria automatically via API, so no manual uploads or extra steps are required.
4. Once the buyer validates the invoice, the seller can request instant payment with just a click inside your platform.
5. Buyers pay on their usual terms, with Aria collecting the payment.

For sellers, this means getting paid when they want and never having to chase payments. Meanwhile, buyers pay later on their usual terms without disrupting their payment workflow. All of this keeps your marketplace “sticky” and helps with retention of both sides of your ecosystem.

These benefits come at no risk to you. Aria takes full responsibility for extending credit and managing repayments. Our system automatically sends smart, friendly reminders when payments are due, and our team handles debt collection according to a workflow we design with you. That way, payments are recovered smoothly without affecting your relationship with your users.

 

If there’s a dispute over the invoice, your comprehensive terms and conditions should allow you to resolve it, and Aria handles the collection process with emails and phone calls. Aria also has a professional recovery process if necessary. Generally, we cover the risk and the supplier gets paid. 

All of this works to keep both sellers and buyers happy without tying up your capital, complicating operations, or adding additional risk to you. You can stay focused on what matters most: growing your marketplace.

Who do we work with?

We work with B2B marketplaces, talent and staffing platforms, vertical SaaS, ERPs, and corporate payment systems. Most partners process at least €200,000 per month and already manage invoices digitally.

A strong fit typically includes:

• Clean, structured data on debtors, suppliers, and invoices
• A clear payment flow and approach to handling fees
• A technical team ready to embed our API

That said, every platform is different. Even if you don’t meet every criterion, we’re flexible and happy to explore how Aria can work for your setup.

Why choose Aria as your embedded invoice factoring solution?

With Aria, you can speed up payments to your suppliers all without depleting your cash or taking on any credit risk. And unlike traditional providers that turn small suppliers away, we can support them too, since we underwrite the buyer, not the supplier. That’s what makes fast, accessible financing possible across your entire platform.

Here’s what sets us apart.

Embed invoice factoring with a simple REST integration and automate servicing small suppliers

Companies may hesitate to embed financial products because of how disruptive and complex integrations can be. That’s not the case with Aria. Our REST API slots into your existing workflow, which is especially important if you handle lots of small invoices and need automation. 

You can start small with our manual dashboard and move to a full API integration when your team is ready. We adapt to your setup, not the other way around, customising the flow to match your product and tech stack.

You’ll also get hands-on support, including:

• A dedicated implementation manager
• A key account manager who knows your business
• Direct access to our product and finance teams for unique needs

You’re in control of fees too: you can absorb them or pass them on transparently to suppliers. Either way, offering instant payments becomes a clear advantage for your marketplace, helping you attract and retain sellers while opening the door to new revenue opportunities and additional revenue streams.

Aria’s automated risk analysis system keeps you compliant and protected without sacrificing speed

Compliance and risk management are essential, but they shouldn’t delay payouts or frustrate users. Aria builds these controls directly into your marketplace, handling all the necessary checks behind the scenes, including:

• • Global KYC/KYB checks: We verify identities for users in 100+ countries.
  • Credit and solvency assessments: We score debtor financial health and calculate recommended credit limits.
  • AI-powered fraud detection: Advanced tools help spot suspicious activity before it becomes a problem.

• Invoice validation and tracking: Buyers approve invoices via Aria’s white-label interface, while real-time tracking helps us anticipate and prevent any disputes.

User data flows straight into Aria when they sign up, allowing us to trigger credit limits, risk reviews, and compliance checks automatically through our underwriting process.

With everything embedded and automated, you reduce manual work, keep costs down, and handle even high volumes of small invoices with ease. Sellers get paid fast, buyers keep their usual terms, and your marketplace stays secure and compliant.

Expand to new markets confidently with a bespoke solution that includes multi-country and multi-currency support

You don’t want to integrate a financing solution you’ll outgrow in a few years. As your transaction volume increases and you expand into new markets, your embedded factoring partner should be able to keep pace and adapt to whatever comes your way.

With €2 billion in financing capacity, Aria can manage growth at any scale. Whether your volume doubles overnight or you experience a sudden spike in demand, we can handle it. 

We provide instant financing for buyers and sellers in over 100 countries, supporting multiple currencies, including EUR, USD and GBP.

We’re also highly adaptable. If you have a unique business case or need support in a new geography, our team works with you to find a solution. With this combination of scale and flexibility, your marketplace can expand confidently, no matter where your growth takes you.

How Aria helped Job&Talent go from 20 factoring partners to one seamless solution

Job&Talent is an AI-powered workforce platform that placed 300,000 workers and processed €1.8B in payments in 2024. Like many marketplaces, they faced a familiar gap: buyers paid on long terms, but workers needed funds immediately. To bridge it, they were advancing payments themselves and juggling 20 different factoring partners, a process that was slow, manual, and resource-heavy.

 

Aria simplified everything. With a direct NetSuite integration, invoices now flow automatically and workers get paid in under 24 hours. What once required three people and hours of admin now takes one person a fraction of the time. Aria also removed a two-week cash flow delay and eliminated the need to manage multiple financing partners.

 

Beyond speed, Job&Talent values Aria’s responsiveness and flexibility, especially as they expand into new markets. With Aria, they now have a single, scalable financing solution that keeps workers paid and their operations running smoothly.

Choose an embedded invoice factoring solution that’s compliant, customised, and scalable

Embedded invoice factoring helps you solve the payment tug-of-war between buyers and sellers, letting you offer instant payments without using your funds or taking on risk.

By embedding factoring directly into your platform, you keep the experience consistent for your users. At the same time, automated processes – from compliance checks to payments – allow you to finance the smallest suppliers while also freeing you to focus on scaling your marketplace.

As you grow, Aria grows with you. With €2 billion in financing capacity, multi-currency support, and flexible API integration, we make it simple to expand into new markets and keep things running smoothly. Plus, our team is always ready to help you tailor the solution to your needs.

Reach out for a demo to see how it all works.

Embedded invoice factoring FAQs

What’s the difference between embedded invoice factoring and traditional factoring?

Traditional factoring usually involves a lengthy application process with a bank or financing company and tends to favour larger companies with a proven credit history. Embedded invoice factoring solutions integrate directly into your platform. Credit checks and risk assessments are automated, and sellers can onboard themselves without leaving your marketplace, allowing marketplaces to serve smaller suppliers that traditional factors may overlook.

Who can use Aria? 

We work with B2B marketplaces, talent and staffing platforms, vertical SaaS, ERPs, and corporate treasury systems – typically those handling at least 200,000€ worth of transactions per month. Your platform should have a digital invoicing process and structured data so we can integrate easily, but we’re flexible and happy to adapt.

How much control do I have over my customers’ experience?

Aria integrates into your platform, so sellers and buyers interact directly through your familiar software and interface. We work closely with you to customise the integration, as well as to design a debt collection workflow that fits your processes and preserves your relationships with users.