5 minutes Getting Started
Overview
Congratulations on receiving a payment-linked advance offer from SAPI! This guide explains every element of your offer so you can make an informed decision about your business financing.
Your Offer Letter Explained
Your personalized offer letter contains key terms that determine how much you'll repay and how quickly. Let's break down each component.
Advance Amount
What it is: The capital SAPI will transfer to your business bank account.
Example: £20,000
This is the amount you'll have available immediately to invest in your business inventory, equipment, marketing, staff, or any operational needs.
Factor Rate
What it is: The multiplier used to calculate your total repayment amount.
Example: 1.30
This means you'll repay £1.30 for every £1.00 you receive. Factor rates typically range from 1.15 to 1.50, depending on your business strength and risk profile.
Why factor rates?
Unlike interest rates (which accumulate over time), factor rates are fixed from day one. You know exactly what you'll repay, regardless of how long it takes.
Total Repayable Amount
What it is: The complete amount you'll repay over time.
Calculation: Advance Amount × Factor Rate
Example: £20,000 × 1.30 = £26,000
This is your total obligation. No hidden fees, no additional charges (unless you enter arrears). The £26,000 includes both the £20,000 advance and the £6,000 cost of financing.
Cost of Financing
What it is: The difference between what you receive and what you repay.
Calculation: Total Repayable - Advance Amount
Example: £26,000 - £20,000 = £6,000
This £6,000 is the cost of accessing £20,000 immediately. It covers SAPI's risk, underwriting, and providing flexible repayment terms.
Repayment Percentage
What it is: The percentage of your daily card sales that goes toward repayment.
Example: 15%
If you process £1,000 in card sales today, we collect £150 (15%) tomorrow via Direct Debit. If you process £500, we collect £75. If you process nothing, we collect nothing.
How it's calculated:
We analyse your recent sales trends to set a percentage that's affordable based on your typical revenue while ensuring reasonable repayment timeframes.
Estimated Repayment Duration
What it is: An estimate of how long repayment will take, based on your recent average daily sales.
Example: 9-11 months
Important: This is an estimate only. Actual duration depends on your future sales:
- Higher sales = faster repayment
- Lower sales = slower repayment
- Consistent sales = predictable timeline
How Repayment Works Day-to-Day
Let's walk through a real example.
Example Scenario
Your offer:
- Advance: £20,000
- Total Repayable: £26,000
- Repayment Percentage: 15%
Your typical sales:
- Average daily card sales: £1,200
Daily repayment calculation:
Monday: £1,500 in sales × 15% = £225 collected Tuesday Tuesday: £800 in sales × 15% = £120 collected Wednesday Wednesday: £1,200 in sales × 15% = £180 collected Thursday Thursday: £1,600 in sales × 15% = £240 collected Friday Friday: £2,000 in sales × 15% = £300 collected Saturday Saturday: £500 in sales × 15% = £75 collected Sunday Sunday: £0 in sales × 15% = £0 collected Monday
Weekly total: £1,140 collected across 7 days
Remaining balance: £26,000 - £1,140 = £24,860 after week 1
At this pace, you'd repay the advance in approximately 23 weeks (5-6 months).
Comparing Your Offer to Other Options
Payment-linked Advance vs. Bank Loan
Speed
- SAPI: 24-48 hours decision, 1-2 days funding
- Bank: 2-8 weeks decision, 1-2 weeks funding
Repayment flexibility
- SAPI: Adjusts daily with sales volume
- Bank: Fixed monthly payment regardless of revenue
Cost
- SAPI: Factor rate 1.15-1.50 (equivalent to ~25-60% APR depending on repayment speed)
- Bank: APR 6-15% typically
Approval criteria
- SAPI: Payment processing history, business viability
- Bank: Personal credit score, trading history, collateral, lengthy financials
When SAPI makes sense:
You need capital quickly, value flexible repayments, and can afford the higher cost for speed and convenience.
When a bank loan makes sense:
You qualify for traditional lending, don't need funds urgently, and want the lowest possible cost (even with fixed payments).
Payment-linked Advance vs. Credit Card
Amount available
- SAPI: £5,000-£250,000
- Credit card: Typically £5,000-£25,000
Repayment
- SAPI: Automatic, based on sales
- Credit card: Manual, minimum payments required
Cost
- SAPI: Factor rate 1.15-1.50 (fixed, transparent)
- Credit card: APR 15-30%+ (variable, compounds monthly)
Impact on personal credit
- SAPI: Generally does not affect personal credit unless personal guarantees are required and default occurs
- Credit card: Directly impacts personal credit score
Making Your Decision
Consider these questions:
Can You Afford the Repayment Percentage?
Look at your typical daily sales. If you process £1,000/day and your repayment percentage is 15%, can you operate with £850/day available after collection?
Tool: Review your bank statements from the last 3 months. What were your lowest sales days? Could you still operate if 15% was collected on those days?
Do You Have a Clear Purpose for the Funds?
Payment-linked advances work best when you're investing in growth:
- Inventory for busy season
- Equipment that increases capacity
- Marketing that drives new customers
- Bridging a temporary cash flow gap
They work less well for:
- Covering ongoing losses
- Paying off higher-priority debts
- Speculative investments
Is the Timeline Realistic?
The estimated 9-11 months is based on recent sales. Ask yourself:
- Are my sales growing, stable, or declining?
- Do I have seasonal variations coming up?
- Am I confident in maintaining current sales levels?
Have You Compared Alternatives?
Before accepting, ensure you've considered:
- Bank loans or credit lines
- Business credit cards
- Invoice financing
- Peer-to-peer lending
- Personal savings or director's loans
Questions to Ask Before Accepting
What happens if my sales drop significantly?
Repayments automatically slow down. If you process fewer card sales, less is collected. Contact us early if you anticipate challenges.
Can I repay early?
Yes. Contact us for an early settlement quote, which may include a discount on remaining balance.
Are there any other fees?
Standard repayment has no additional fees. Fees apply if you enter arrears or miss Direct Debit payments.
Can I get a different offer?
The offer is based on our assessment of your business. If you believe there's information we haven't considered, contact [email protected] before declining.
What if I need more or less than offered?
Contact us. We may be able to adjust within reason based on your circumstances.
Accepting Your Offer
If you're ready to proceed:
Click "Accept Offer" in your email
Review and sign the Payment-linked Advance Agreement
Set up Direct Debit via GoCardless
Receive funds within 1-2 business days
Offer validity: 7 days from issue date. Contact us if you need an extension.
Declining Your Offer
If you decide not to proceed:
Simply do not accept the offer; it will expire automatically after 7 days
No obligation, no fees, no penalties
You can reapply in the future if circumstances change
Frequently Asked Questions
Q: Is the factor rate negotiable?
A: Factor rates are based on risk assessment. If you believe there's information we've missed, contact our team, and we'll review.
Q: Can I accept a partial amount (e.g., £15,000 instead of £20,000)?
A: Contact [email protected]. We may be able to adjust your offer.
Q: What if my circumstances change after accepting?
A: You have a 14-day cooling-off period after receiving funds. You can return the full amount with no cost during this time.
Q: Can I get another advance after repaying this one?
A: Yes. Many customers take multiple advances. Once you've repaid 50-70% of your current advance, you may qualify for a top-up or new advance.
Need Help?
Our team is happy to discuss your offer and answer questions.
Email: [email protected]
Phone: +44 20 3868 4990
Business hours: Monday-Friday, 9am-5pm GM