Financing and insurance referrals

Small business financing, the real cost in dollars first

Esplanda arranges capital advances, equipment financing, insurance, gift card programs and check guarantee through partner programs, and shows you the total repaid, the term and the holdback before you sign.

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Esplanda earns a referral fee when a deal funds, and the recommendation is the same either way. What the software costs is on Esplanda pricing.

In short

Esplanda is a referral partner for small business financing, never the lender or the carrier. Capital advances, equipment financing and leasing, business insurance including liquor liability, gift card programs and check guarantee all come from partner programs that already work with independent retailers.

Before you sign, you see five numbers in writing: the total repaid, the factor rate in dollars, the APR-equivalent where one can be worked out, the term and the holdback. Esplanda earns a referral fee when a deal funds, and the recommendation is the same whether or not it pays.

  • Capital advances
  • Equipment financing
  • Equipment leasing
  • Business insurance
  • Gift card programs
  • Check guarantee

What Esplanda arranges

Five partner programs, one plain answer

Esplanda introduces you, gathers the paperwork the partner needs and translates the offer into plain dollars. The contract is between you and the provider, which underwrites, funds and services it.

The five partner programs, what each is for, and when each is usually the wrong tool.
ProgramTypically used forUsually the wrong tool when
Capital advanceA dated opportunity with a return you can calculate: a cooler build-out, a large buying-group order tracked in rebate management software, a second locationYou are covering a seasonal dip or a shrinking year
Equipment financingCoolers, shelving, walk-ins and security: assets that earn for a decadeThe item is cheap enough to buy outright
Equipment leasingLarge fixtures you intend to replace on a cycleIt is a card terminal or a scanner: see POS hardware
Business insuranceGeneral liability, property, workers' compensation and liquor liability: see liquor store insuranceYou have not compared your current renewal quote first
Gift cards and check guaranteeGift card programs, and cover for accepted checks that bounceChecks are a trivial share of your tender mix

The true cost, in dollars

What Esplanda discloses before you sign

Funders quote factor rates because a factor rate sounds small. Esplanda writes the cost the way it will arrive in your bank account.

A 1.32 factor on $50,000 sounds like thirty-two of something. It is $16,000.

  • Amount advanced$50,000$50,000 lands in your account
  • Factor rate 1.32$16,000of cost, in dollars
  • Total repaid$66,000Often left out of the quote
  • Term~9 monthsAt your current card volume
  • Holdback12%Of every day's card settlement, before you see it
  • APR-equivalentNear 85%Worked out wherever the term allows one

Illustrative example: a capital advance written the way Esplanda writes every quote. A sales-driven advance has no fixed term, so Esplanda calculates the APR-equivalent wherever the term allows one and marks the field when it does not.

How Esplanda is paid

Referral fee disclosed, advice unchanged

Esplanda earns a referral fee from the partner when a deal funds. It is disclosed here, in plain text, and again in writing before you decide.

  • The fee, in plain text

    Referral revenue is ordinary in this trade. Esplanda says it on the page you are reading, not in a footnote on page nine of an agreement.

  • Referral revenue never biases a recommendation

    The advice is written the way it would be written if the fee did not exist, including when the recommendation is not to borrow at all.

  • The same standard on payments

    Esplanda processes card payments as a reseller for First American Payment Systems, a Deluxe company, and says so on credit card processing for small business.

An owner who knows how a recommender is paid can weigh what the recommender says. That is why the next section exists.

When not to borrow

Two cases where the answer is don't

Both come up constantly, and in both the answer costs Esplanda its fee. An owner who only ever hears yes has no way to value the yes.

Case 1

A capital advance against a seasonal dip

An advance is repaid as a share of daily card sales. In a slow quarter the term stretches, the holdback keeps taking its share of a smaller number, and the cost of each remaining dollar rises.

If sales are soft because it is February, February is not a financing problem. If the market moved, an advance buys you nine months and a $16,000 bill.

Built for instead: a defined opportunity with a return you can calculate, like a cooler that adds a category, a deal-buy at a price that will not come back, or a second location with a signed lease. Run the return first.

Case 2

Leasing a card terminal

Bought outright$739 to $1,099

48-month lease at $49$2,352

The lease is usually non-cancellable: it survives a processor switch, a closed store and a sale of the business. Esplanda earns nothing by telling you to buy the box, and it tells you to buy the box.

What the register needs is on POS hardware. To check the rest of your payments, use the credit card processing fee calculator on your current statement.

Asking about financing

What happens when you ask

Six steps. The first two often end the conversation without a deal, and that is the intended result.

  1. You say what the money is for

    Not how much you want: what it buys and what that returns.

  2. Esplanda checks whether borrowing fits at all

    Seasonal dips, small equipment and cash gaps that better buying would close, through purchase order software, get told so here.

  3. The partner quotes

    Capital advance, equipment finance, lease, insurance, gift card program or check guarantee, depending on the need.

  4. Esplanda restates the quote in dollars

    Total repaid, cost, term, holdback and the APR-equivalent where one exists.

  5. The referral fee is disclosed before you decide

    With a plain statement of whether the recommendation would change without it. It does not.

  6. You sign with the provider

    Servicing, claims and collections belong to them. Esplanda holds no position in the deal after it funds.

Questions

Financing questions owners ask

Does Esplanda lend me the money?

Esplanda is a referral partner, never the lender and never the insurance carrier. Capital advances, equipment financing, insurance, gift card programs and check guarantee are all arranged through partner programs, and the contract is between you and that provider. Esplanda's job is to put the real numbers in front of you before you sign.

What does a merchant cash advance actually cost?

More than most owners expect, which is why Esplanda writes it in dollars. In the illustrative example on this page, a $50,000 advance at a 1.32 factor rate means $66,000 repaid, or $16,000 of cost, over roughly nine months, with about 12% of your daily card settlement held back. That works out near an 85% APR-equivalent. Fast money is expensive money, and you should see that number before you decide.

Does Esplanda earn anything if I take the financing?

Yes, and it is disclosed here in plain text. Esplanda earns a referral fee from the partner when a deal funds. The rule is that the recommendation is the same whether or not it pays, including when the recommendation is that you should not borrow at all.

When is a capital advance the wrong instrument?

When you are borrowing against a seasonal dip. An advance is repaid as a percentage of daily card sales, so a slow quarter stretches the term and a slow year deepens the hole. Advances suit a dated opportunity with a calculable return, like a cooler build-out, a buying-group order or a second location, and they suit badly as a substitute for cash flow that is not coming back.

Should I lease a card terminal or buy it?

Buy it, in almost every case. A terminal costs $739 to $1,099 outright; the same terminal on a 48-month lease at $49 a month costs $2,352, and those leases are usually non-cancellable. Esplanda says so even though it earns nothing by saying it.

What is a holdback percentage?

The holdback is the share of your daily card settlement that goes to the funder before the rest reaches your bank account. On a typical advance it runs between 8% and 15%. Repayment speed therefore tracks your sales, and a strong month repays the money faster and raises the effective annual cost.

What is check guarantee and does my store need it?

Check guarantee means a third party pays you for an accepted check that later bounces, in exchange for a fee per check or a percentage of its value. It is worth a look when checks are still a meaningful share of your tender mix. For a store taking a handful of checks a week, the fee usually costs more than the bad checks do.

Do I have to be an Esplanda customer to get a financing referral?

No. The referrals stand on their own and the disclosure rules apply either way. Nothing on this page is bundled into the software or conditional on buying any of it; what the software costs is published on Esplanda pricing.

Know the cost before you borrow

Start free today, or book a demo and we'll walk through your store's numbers, and whether borrowing fits at all.

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