We　study　platform　financing　in　comparison　with　trade　credit　for　lending　to　third-party　sellers,　considering　scenarios　where　default　risk　is　driven　by　external　factors　(exogenous)　or　influenced　by　the　parties’　decisions　(endogenous).　Our　findings　indicate　that　under　exogenous　default　risk,　although　platform　financing　exposes　the　platform　to　the　seller’s　default　risk,　it　can　enhance　the　seller’s　sales　by　providing　low-rate　finance　and　reducing　the　wholesale　price　because　the　supplier　remains　isolated　from　default　risk.　Platform　financing　emerges　in　equilibrium,　benefiting　all　parties,　particularly　in　businesses　facing　significant　default　risk,　high　product　costs,　operating　in　small　markets,　or　having　a　high　commission　rate.　In　cases　of　endogenous　default　risk,　platform　financing　can　mitigate　the　seller’s　opportunistic　behavior,　either　preventing　or　reducing　default　risk,　and　the　effects　of　product　costs　and　market　uncertainty　may　become　nonmonotonic.　In　certain　scenarios,　platform　financing　arises　in　equilibrium　when　the　product　cost　is　intermediate　or　sufficiently　high　but　not　in　between　and　when　market　uncertainty　is　moderate　but　not　low　or　high.　We　also　explore　the　impacts　of　the　seller’s　initial　capital　and　credit　limits,　providing　valuable　managerial　insights.　©　2024　INFORMS.