Marshmallow is a direct lender

Being the lender means Marshmallow captures the interest spread and owns the customer repayment relationship, not just a referral fee. In practice, the dealer introduces the buyer, Marshmallow underwrites the loan, funds the hire purchase agreement itself, and then collects monthly payments over up to 60 months. That is a much bigger economics stack than broking, and it fits Marshmallow’s existing edge with thin file, new to UK drivers who often struggle to get approved elsewhere.1 2 3 4

• The product is set up as hire purchase, with loans up to £25,000 and terms from 12 to 60 months. Marshmallow publishes representative pricing and fees on its consumer page, which is what a lender does when it is originating the credit rather than passing the customer to another finance company.2
• Dealer distribution does not make it a broker model. In UK motor finance, dealers usually act as credit brokers that introduce customers to lenders. Marshmallow sits on the other side of that handoff, taking applications through partners and approving and funding the agreement itself.3 4
• This matters because Marshmallow already insures more than 1 million drivers and identified that only 8.8% of its migrant customers used dealership finance on their last car purchase. Car finance lets it monetize the vehicle purchase event itself, not just the insurance policy attached to it.1 5

The next step is a tighter insurance and lending bundle, where Marshmallow uses its underwriting data to price both the car and the loan for customers that incumbents often misread. That pushes the company further from a single product insurer and closer to a specialist financial platform for new to UK households.1 5