The Hidden Math Behind FinTech Lending (And What It Really Takes to Scale)

Hey everyone.

Welcome back for another bite to chew on. 

Let’s get really honest for a second.

Many early-stage brands we talk to are following a playbook that no longer works.

They think if they can just crack Meta ads, they’ll scale.
They think “1% per month” on a FinTech loan sounds fair.
They think they can figure out ops as the scale.

But that's not the only or even the best way to do it.

In our latest podcast, we sat down with Simran Khanna from Settle and Mitalee Bharadwaj from Transcendence Coffee — a founder who scaled her coffee syrup brand into 1,000+ cafes without running a single Meta ad. No joke.

Let’s go through this crash course in modern brand building.

On the Menu: 

• The finance 101 you need to know

• Why ops come BEFORE scale

• Scaling without Meta Ads

• How to forecast when demand is unpredictable

BWT - Don’t miss out on our entire conversation here:

Listen on Spotify 🎧 and Apple 🍎 as well.

📉 The Finance 101 Class You Can’t Skip

Before you can scale a brand, you need to know how to fund it (without getting fleeced).

Most founders without any sort of finance background misunderstand their cost of capital. Partially because many lenders don’t make it easy to figure out. 

That’s where this story starts.

FinTech lenders love to say “1% per month.” Sounds great, until you do the math.

👇 A typical FinTech lending setup:

• You take out a $1,000,000 loan

• You pay a flat $40,000 fee

• You repay 25% of the principal every month for 4 months

💡 But here’s what really happens:

Each month, your usable capital drops:

• Month 1: $1,000,000

• Month 2: $750,000

• Month 3: $500,000

• Month 4: $250,000

That means your average capital over the 4 months is:

(1,000,000+750,000+500,000+250,000)/4=625,000(1,000,000 + 750,000 + 500,000 + 250,000) / 4 = 625,000(1,000,000+750,000+500,000+250,000)/4= $625,000

So while it looks like you're paying 4% (1% per month) on $1M, you're actually paying $40K on just $625K of average usable capital. 😬

That’s a 4-month interest rate of:

40,000/625,000=6.4%40,000 / 625,000 = 6.4\%40,000/625,000=6.4%

Annualized (x3), that = 19.2%APR

🪤 This is what we call the bullet repayment trap.  And if you’re not careful, it can quietly destroy your margins.

This kind of math surprised even us. It also made us rethink how we evaluate capital offers entirely.

Because the real problem isn’t just the rate, it’s how and when you’re charged.

That’s what led us to explore alternative structures, and it’s what we appreciated most when we looked under the hood at Settle’s working capital offering.

The difference = amortization.

With Settle’s amortized structure, we pay interest only on the remaining balance each month, and the APR and total finance charge are transparently disclosed for every transaction. No unwelcome surprises.

Our effective APR from Settle was significantly less** than the merchant cash advance model offered by other fintechs. That’s a massive difference in savings for us, especially at scale.

** Note that the specific interest rate will vary based on underwriting factors like your revenue, bank balance, credit eligibility, etc. 

📌 Takeaway: If you're accessing working capital, make sure you understand exactly what you're paying, and on what. Know the real APR and demand the amortization schedule. 

Most brands don’t, and this is a risk that can sink you. 

🏗 Build the Ops Foundation Before You Need It

Of course, understanding your capital is just one part of the equation. Even with the best rates, funding alone won’t save you if your operations are a mess.

That’s why we always recommend building systems before the chaos hits.

When we started Obvi, we waited too long to get our operational and financial infrastructure in place. By the time we brought in partners, we were already struggling to keep our heads above water.

Mitalee took a smarter approach with her brand.

While most founders wait until they’re overwhelmed to build systems, she started laying the foundation early, before the rush of orders and the chaos of scale.

She leveraged Settle to handle bill pay, purchase orders, and inventory planning. Not as a quick fix, but as a long-term backbone for the business.

With that infrastructure in place, she had:

• Clean visibility into cash flow

• Strong vendor terms from the jump

• Reliable forecasting inputs

• Access to working capital when needed

📌 Takeaway: Whatever system ot tool you use, establishing good ops is proactive. Waiting until you're duct-taped systems get overwhelmed is how brands break.

🚪 How to Scale Without Meta Ads

So what happens when you combine strong financial systems with a distinct brand and relentless hustle? 

You get growth that doesn’t rely on ad algorithms or investor handouts.

Mitalee built Transcendence completely organically with zero digital ad spend.

Instead, she went all-in on storytelling and human relationships:

Differentiated product: She launched with flavors inspired by her heritage: Gulab Jamun and Baklava syrups. They weren’t just tasty. They were unique and memorable.

Old-school hustle:

✅ Door-to-door coffee shop visits.
✅ CRM built in Google Maps.
✅ Backpacks full of syrup on the subway.

Real relationships: Baristas now text her directly to plan seasonal menus. 

This wasn’t “viral” growth. It was earned growth. And now she’s in 1,000+ cafes.

📌 Takeaway: You don’t necessarily need Meta to get traction. You need a product that stands out and a willingness to put in the work early on.

Even if it’s stuff that doesn’t scale.

📦 Forecasting Isn’t a Spreadsheet. It’s a Survival Skill

But even if you scale the right way, a new challenge emerges: volatility.

Whether growth comes from Meta or lugging product around on the subway, forecasting demand gets harder as you scale, and the stakes only get higher.

At Obvi, we saw it firsthand.

We recently launched a new funnel for a kit called the Burn Box (a 3-product bundle of fat burners taken throughout the day).

• It went from doing $8–10K a day to $30K a day almost overnight. 🚀

• The problem is we didn’t have 3x the inventory across all three SKUs. 🫤

We sold out for nearly 20 days, and kept taking orders with delayed shipping.

By the time the next batch landed, performance had dipped…and we were left holding excess stock. 😢

Mitalee faced the same challenges:

That’s the game now: volatility.

You won’t forecast perfectly, but you can build systems that reduce the damage and improve your decision-making over time.

Here’s what that looks like:

🔁 Forecasting Systems That Help Tame the Chaos

At Obvi:

• Used ROAS + daily velocity per SKU to calculate inventory days on hand

• Adjusted forecasts based on media spend and funnel performance

• Built scenarios for “what if we 3x this ad?”

At Transcendence:

• Used Settle to manage POs and map purchasing to projected café demand

• Built internal forecasting templates using ChatGPT

• Maintained tight feedback loops with buyers to understand seasonal trends

• Created production calendars based on flavor lifecycles and reorder patterns

🧰 Operator Toolbox

🤑 Settle combines your bill payments, receivables tracking, inventory management, and accessible capital financing all under one roof. Find out how they can help you grow →

🔥 Finaloop Ecom Academy - Learn how to scale your brand with financial mastery at this 1-day FREE event. → Spots are limited. Don’t wait.  

🚨Reminder: We have $250,000 in free AppLovin Credits! We’re handing out more and more of these credits every day. Fill out this quick form to get yours before they’re gone → 🚨

⭐️ Agency & Vendor Recommendations! We’re introducing brands to our top vendors and partners. Just fill out the linked form and let us know what you’re looking for. Quick connect →

Some of these are referral partners. We only share what we actually use or would recommend to a friend.