Xplor Capital Embedded Lending for SaaS providers

Clearent by Xplor, a leading U.S. payment processor under Xplor Technologies, has announced the launch of Xplor Capital, a new embedded financing solution that enables Software-as-a-Service (SaaS) providers to seamlessly integrate business financing directly into their software platforms. This initiative is powered by a strategic partnership with Parafin, a “capital as a service” platform specializing in solutions for small and medium-sized businesses.

Key Features and Benefits

Frictionless Access to Capital

• Merchants receive pre-approved funding offers based on their sales data, eliminating the need for lengthy applications and traditional credit checks.

• The application process is streamlined, and funds can be made available in as little as one business day after approval.

Embedded Growth Solution

• SaaS providers can integrate Xplor Capital via a simple API or branded loan widget, making it easy to offer financing as a value-added service within their existing software.

• This integration is designed to require minimal development effort, making it a low-lift solution for software partners.

Flexible, Transparent Repayment

• Repayments are made through a one-time fixed fee and automatic deductions from a fixed percentage of daily sales, with no late fees or hidden interest.

• This model allows repayments to adjust with business performance, offering predictability and flexibility for merchants.

Increased Revenue and Engagement

• Businesses using embedded financing have seen a boost in revenue, as access to capital supports expansion, cash flow management, and operational investments.

• SaaS platforms offering Xplor Capital can increase customer engagement and retention by providing crucial financial tools within their ecosystem.

Addressing Small Business Financing Challenges

Recent industry data highlights significant demand for alternative funding:

• 67% of U.S. small-business owners plan to pursue funding within the next 12 months, yet 77% are concerned about their ability to access capital amid a challenging lending environment.

• Traditional loan approval rates are declining, and many business owners are resorting to personal savings to finance operations.

Xplor Capital aims to address these challenges by providing a fast, accessible, and transparent alternative to traditional lending, particularly for businesses in sectors such as fitness, field services, personal services, and more.

How It Works for SaaS Providers

• SaaS providers can embed Xplor Capital into their software, enabling their merchant customers to access pre-approved funding directly within the tools they already use for payments and business management.

• The underwriting process is based on sales volume and transaction data, not just credit scores, expanding eligibility for small businesses.

• Offers range from $500 to $10 million, supporting a wide variety of capital needs-from marketing and equipment purchases to expansion projects.

Market Impact and Expansion

Since its initial rollout, Xplor Capital has already provided over $1 million in loans to eligible businesses, with funds used for remodeling, new locations, equipment, and hiring. While currently available in the U.S., international expansion has begun, starting with the UK.

Xplor Capital by Clearent and Xplor Technologies represents a significant step forward in embedded fintech for SaaS platforms, offering a fast, flexible, and developer-friendly way for software providers to empower their customers with direct access to business financing-helping small businesses grow, manage cash flow, and thrive in a tough economic environment.

How does Xplor Capital address current market challenges for SMB financing?

Traditional business loans are declining, leaving many small business owners concerned about accessing capital—up to two-thirds now rely on personal savings to finance their businesses. Xplor Capital addresses this gap by leveraging embedded lending, which integrates financing directly into digital platforms where merchants already operate, providing speed and flexibility that traditional banks often lack.

Merchant Benefits

How does the pre-approval process work for merchants seeking capital?

Merchants receive pre-approved funding offers based on their sales volume processed through the platform. This approach bypasses traditional credit checks and lengthy application forms, using real-time sales data instead of outdated credit models to determine eligibility and offer amounts.

What is the typical timeline for merchants to receive funds?

After reviewing and accepting an offer, funds can be available in as little as one business day following approval. The streamlined application process involves reviewing the pre-approved offer, identity verification, linking bank details, and accepting the offer.

What funding amounts are available through Xplor Capital?

Funding offers currently range from $500 to $10 million, with amounts tailored based on each merchant's sales data available within their SaaS platform.

Repayment Structure

How does the repayment structure differ from traditional loans?

Xplor Capital's repayment structure features a fixed capital fee and automatic deductions taken as a fixed percentage of sales. This creates predictability for merchants while providing flexibility during slower business periods. Importantly, there are no late fees or hidden interest charges.

Why might this repayment model be preferable for small businesses?

This model aligns repayment with business performance, reducing pressure during slower periods and scaling up during stronger sales cycles. This alignment helps preserve cash flow, which Nick Campbell, Chief Product Officer of Payments at Xplor Technologies, identifies as "the most critical enabler of small business success."

SaaS Provider Advantages

What is required for SaaS providers to implement Xplor Capital?

Integration typically requires minimal development resources, using either a simple API or branded loan widget. This low-lift implementation allows SaaS providers to quickly add embedded financial services alongside their payment processing capabilities.

How does offering embedded financing benefit the SaaS provider's business model?

Embedded financing solutions like Xplor Capital provide multiple benefits:

• Increased customer lifetime value (CLTV)

• Improved customer retention rates

• New revenue streams through monetization of the user base

• Differentiation in a competitive market

• Creation of "stickier" user experiences that drive loyalty

What revenue opportunities exist for SaaS providers offering embedded financing?

SaaS providers can earn higher revenue share from transactions, boost their bottom line by monetizing financial services, and receive commissions or referral fees from financial providers for customers referred to services offered on their platform.

Market Impact and Future Outlook

In which industries is Xplor Capital currently available?

Initially launched in the United States, Xplor Capital is available to Clearent by Xplor software partners and their customers across various "everyday life" verticals where Xplor Technologies operates, including:

• Childcare & Education

• Fitness & Wellbeing

• Field Services

• Personal Services

Specific solutions include Xplor Mariana Tek, FieldEdge by Xplor, Service Autopilot by Xplor, and Xplor Spot.

What early results has Xplor Capital demonstrated?

Xplor Capital has already provided over $1 million in loans to eligible customers within three months of its initial launch, demonstrating significant market demand and adoption.

How does embedded lending fit into the future of alternative business financing?

Embedded lending is rapidly becoming a must-have feature in digital ecosystems, representing the future of accessible, intelligent financing. As the embedded finance market continues its rapid growth trajectory, solutions like Xplor Capital highlight the critical role digital platforms play in financial services distribution and the strategic advantage of leveraging embedded finance infrastructure to remain competitive.

Partnership Opportunities

How do licensed financial institutions benefit from partnering with embedded financing solutions?

Financial institutions partnering on embedded solutions, like Celtic Bank issuing loans for Xplor Capital via Parafin, benefit from better margins and gain access to a broader customer pool by leveraging platforms with strong user engagement. This model unlocks new revenue streams that previously may not have existed for either the platform or the financial partner.

What makes embedded lending different from traditional lending partnerships?

Embedded lending leverages real-time transaction data available through the platform rather than relying solely on traditional credit scores or financial statements. This enables more accurate risk assessment, faster approvals, and a seamless user experience that's integrated directly into the merchant's existing software environment.Xplor Capital - Embedded Financing FAQ

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