Model B2B embedded lending unit economics — NIM, RAROC, and break-even default rate.
An interactive lab for BaaS product managers, credit leads, and embedded-finance architects. Configure your lending programme — product type, APR, default rate, cost of capital, loss curve — and receive a full P&L waterfall, sensitivity table, and exportable AP2 mandate in seconds.
STEP 01 Configure Lending Programme
Set your product type, portfolio parameters, and capital structure. Every output below recomputes automatically when you click Model.
Net Interest Margin (NIM) · Gross APR minus cost of capital. This is the gross spread before credit losses and operational costs.
Expected Loss (EL) · PD × LGD — the Basel II/III simplified approach. EL is deducted from NIM as a provision expense, not a capital charge.
RAROC · Net Revenue divided by Allocated Capital (capReq × portfolio). Healthy embedded lending programmes target 15–25%.
Break-even PD · Solves for the default rate at which Net Revenue = 0, holding all other parameters constant. The margin between current PD and break-even PD is your credit quality buffer.
⬡ Illustrative model · B2B lending only · not credit advice · for programme design and investor modelling purposes only