Small businesses rarely have the luxury of waiting for capital to arrive on someone else’s timetable. When equipment fails, inventory runs low or a supplier offers a limited-time discount, the difference between approving a loan and making that loan immediately usable can determine whether an opportunity is captured or lost.
That gap between approved capital and spend-ready capital is becoming an infrastructure concern. As cards, digital wallets and modern issuer processing become more deeply integrated into commercial lending, providers must rethink whether an approved loan should first travel through traditional settlement processes before reaching the business owner.
Nikil Konduru, chief commercial officer at Lithic, told PYMNTS that the traditional model often leaves borrowers waiting precisely when speed matters most.
Time is of the essence. According to Ginger Siegel, North America small and medium business lead at Mastercard, delays ripple across day-to-day operations.
“The biggest challenge that small businesses face is really around cash flow uncertainty and everything that cascades from it,” Siegel said during the same interview. Lag times force owners to dip into personal reserves or credit lines.
Siegel elaborated that many businesses also lose purchasing opportunities while waiting for funds to settle, whether that means restocking inventory, accepting new work or taking advantage of supplier discounts. The burden is compounded by administrative work that falls on owners who often manage finance, operations and customer service themselves.
The card is becoming more than a payment vehicle, and in fact is becoming a salve against those pain points.
Traditionally, lenders transferred proceeds through ACH into a checking account before the borrower could begin spending. Card-based disbursement changes that sequence by allowing approved funds to be provisioned immediately through a virtual card and into a digital wallet.
Konduru said the experience becomes substantially different for borrowers.
“We make it seamless to instantly issue a card and provision it to someone’s digital wallet, whether that’s Apple Pay, Google Pay, Samsung, you name it,” he said. The result is that the digital wallet begins to function as a delivery mechanism for working capital rather than simply a repository for payment credentials.
“As an industry, we’re starting to think about cards and digital wallets not just as a way to move money, but as an on-ramp to capital,” Siegel said.
She pointed to the emergence of “loan on card” products, a model that companies like Lithic enable through issuer processing infrastructure, allowing approved credit to be delivered directly through payment credentials instead of waiting for conventional account funding.
“It turns access to capital into something that’s immediate and actionable,” Siegel said. “When credit can be accessed and used in real time, whether it’s through a virtual card or a wallet, it becomes working capital in motion.”
Added Konduru: “The headline here really is that small businesses get the cash that they desperately need faster,” Konduru said. “The time to actually access the funds that they’ve been approved to use drops from having to wait several days to just a couple seconds.”
Digital wallets also fit naturally into broader efforts to simplify financial management for smaller businesses. Rather than switching between multiple applications and funding channels, wallet-based experiences place lending, payments and spending within a single environment.
Instead of losing visibility after funds leave through ACH, lenders can receive merchant category information, transaction timing, location and purchase amounts in real time. Card-based disbursement also generates interchange revenue on borrower spend, creating a new revenue stream that lenders can use to cross-subsidize APRs, widen margin or expand credit access to SMBs who might not otherwise qualify.
The growing role of cards also reflects a broader shift toward programmable lending infrastructure, where capital can carry rules alongside funding.
Card-based lending also alters the economics for lenders.
“The really fantastic thing about card transactions is you can actually generate interchange on the spend that is happening when the borrowers go out into market,” Konduru said. “Instead of being a cost center, this new revenue line item … can either cross-subsidize the actual APRs they’re charging small businesses and borrowers … or you could potentially access a wider base because if there’s more margin to go around, you can presumably take on more risks actually and access more SMBs that previously would not have any access to credit.”
Instead of treating loan proceeds as cash that disappears into an account, lenders can build products that define how credit is used, respond to changing borrower circumstances and adapt throughout the life of the loan.
That visibility enables lenders to create spending policies based on merchant category, transaction size or employee role while receiving transaction data in real time. It also opens the door to more flexible credit products.
“Flexible infrastructure allows us to do many things that really help borrowers at times of hardship,” Konduru said. “You can make it easier for borrowers to smooth out their cash flow based on their specific needs.”
Just as importantly, programmable infrastructure reduces work for lenders themselves. Rather than building and maintaining wallet provisioning, tokenization and issuer-processing capabilities independently, lenders can rely on modern infrastructure that makes those capabilities available through existing digital channels.
Digital wallets are gradually becoming financial hubs where payment credentials, lending products and authentication coexist instead of remaining separate experiences.
Siegel noted that many small businesses already manage invoicing, payroll, expenses and payments across numerous systems. Embedding lending into those existing workflows reduces the need to move between disconnected financial products while allowing owners to focus on operating the business itself.
“The greatest opportunity lies in really bringing the entire ecosystem together, but to do it earlier and more intelligently,” Siegel said. The next stage of SMB lending will be measured less by how quickly credit decisions are made than by how quickly approved capital becomes usable.
Watch the full interview to learn more about:
- How web push provisioning is changing the process of delivering commercial credit through digital wallets.
- Why programmable issuer processing is giving lenders new flexibility to build repayment and spending controls.
- How network partnerships are combining payments, data and security to support the next generation of SMB lending products.
