Parafin Introduces “Pay Over Time” Product Utilizing AI for Small Business Credit Decisions
Parafin, an embedded finance company, has launched “Pay Over Time,” a new financing product designed to enable small businesses to defer payments on essential operational expenses such as inventory, equipment, payroll, advertising, and rent directly through the platforms they currently use. The product is already active with Gusto, offering a payroll line of credit.
Parafin has a history of extending financial support, having provided over $14 billion in financing offers to hundreds of thousands of small businesses through its existing capital products. With the introduction of “Pay Over Time,” the company aims to broaden access to credit by embedding real-time financing options at critical points of need, including checkout processes, invoice payments, and payroll runs, to assist businesses in managing daily expenditures alongside long-term investments.
Unlike traditional lenders that often rely on personal credit scores, Parafin employs AI models powered by large language models to analyze raw banking activity in real time. This process transforms vast amounts of unstructured transaction data into a comprehensive financial profile of a business, facilitating credit decisions in as little as 10 seconds with high approval rates. For platform partners, Parafin manages the underwriting, compliance, and servicing, allowing for seamless integration.
Vineet Goel, Chief Product and Technology Officer and Co-founder of Parafin, stated, “By harnessing large language models and layering our own proprietary models on top, we can assess the financial profile of businesses in real time and deliver credit decisions with low latency, all while maintaining high approval rates.” Goel added, “‘Pay Over Time’ empowers platforms to support their customers at the exact moment of purchase, payment, or payroll. With this launch, we’re just getting started on building a comprehensive suite of financial solutions designed for speed, scale, and the realities of small business financing.”
Beyond payroll, “Pay Over Time” is expanding into diverse applications such as freight booking, restaurant equipment financing, dental supply procurement, and digital advertising. These initial applications highlight the product’s adaptability and the demand for embedded financing solutions that address the specific operational requirements of various businesses.
“Pay Over Time” integrates into Parafin’s existing portfolio of capital and credit solutions, contributing to a more complete suite of financing tools. These combined offerings aim to ensure small businesses can access appropriate financing options efficiently and without friction, aiding in cash flow management and growth investment.
Parafin, founded in 2020 by Sahill Poddar, Vineet Goel, and Ralph Furman, operates as a financial infrastructure company. It enables platforms to offer embedded financial products to their small business customers by managing the complexities of capital markets, underwriting, servicing, compliance, and customer support. The company powers financial services for marketplaces, vertical SaaS platforms, and payment processors, with partners including Amazon, Walmart, and DoorDash, having extended billions in offers to hundreds of thousands of businesses. Parafin is supported by investors such as Ribbit Capital, Thrive Capital, GIC, Notable Capital, and Redpoint Ventures.
All lines of credit mentioned are issued by Celtic Bank and are subject to credit approval, identity verification, and periodic review, with potential for changes without prior notice. These lines of credit are governed by a Line of Credit Agreement and Parafin’s Privacy Policy. Bank transfers are also subject to review.
