6 minutes Documents and Verification
Overview
When you accept your SAPI offer, you'll sign a Payment-linked Advance Agreement. This is a legally binding contract outlining the terms of your advance, repayment obligations, and both parties' rights and responsibilities. This guide explains the key sections of your agreement and what they mean in plain language.
Your Agreement Document
What It's Called
Official name: "Payment-linked Advance Agreement" or "Merchant Cash Advance Agreement"
Parties:
- SAPI Group Limited or SAPI Origination Limited (the provider)
- Your business (limited company, sole trader, or partnership name)
How You'll Receive It
Delivery method: Email via DocuSign or similar electronic signing platform
Subject line: "Please sign: Payment-linked Advance Agreement - [Your Business Name]"
Format: PDF document (typically 10-25 pages including schedules)
When You Sign It
After accepting your offer, you'll receive the agreement within 1-2 business days. You have 7 days to review and sign (or your offer may expire).
Key Sections of Your Agreement
1. The Parties and Recitals
What it says:
Who's entering the agreement (SAPI and your business) and the background (you applied, SAPI assessed, offer was made and accepted).
Plain English:
This section confirms both parties and sets context.
2. Purchase of Future Receivables
What it says:
SAPI is purchasing a specified amount of your future card sales receivables.
Plain English:
You're selling SAPI the right to collect a percentage of your future card sales up to the total repayable amount. This is NOT a loan—it's a purchase of future revenue.
Legal distinction:
This structure means traditional lending regulations may not apply. See the regulatory disclaimer in your agreement.
3. Advance Amount and Repayment Terms
Key terms defined:
Advance Amount
The capital SAPI transfers to you (e.g., £20,000)
Purchased Amount
The total you'll repay (e.g., £26,000)
Factor Rate
The multiplier (e.g., 1.30)
Repayment Percentage (also called "Specified Percentage" or "Remittance Percentage")
The percentage of daily card sales collected (e.g., 15%)
Reconciliation Period
How often repayments are calculated and collected (typically daily)
4. Repayment Mechanism
What it says:
You authorize SAPI to collect the repayment percentage from your business bank account via Direct Debit based on your daily card sales.
Plain English:
Each day, SAPI calculates your card sales and collects the specified percentage the next business day via Direct Debit through GoCardless.
Your obligations:
- Maintain sufficient funds in your bank account
- Notify SAPI if you change bank accounts or payment processors
- Don't cancel the Direct Debit without settling the balance first
5. Representations and Warranties
What it says:
You confirm certain facts are true (e.g., your business is properly registered, you have authority to sign, the information provided is accurate, etc.).
Plain English:
You're promising the information in your application is correct. If you provided false information, SAPI can take action (demand immediate repayment, legal proceedings).
Key representations:
- Business is properly registered and in good standing
- No insolvency proceedings pending
- All information provided is accurate
- You have authority to enter this agreement
- No other facts that would affect SAPI's decision
Why this matters:
If representations are false, SAPI can accelerate your balance (demand full repayment immediately).
6. Covenants (Your Ongoing Obligations)
What it says:
While your advance is active, you agree to:
Positive covenants (things you MUST do):
- Maintain your business in good standing
- Keep proper books and records
- Maintain insurance (if required)
- Provide information upon SAPI's request
- Notify SAPI of material changes (ownership, address, bank account)
- Comply with all laws and regulations
Negative covenants (things you MUST NOT do):
- Not enter insolvency or liquidation proceedings
- Not sell or dispose of significant business assets without notice
- Not change business structure without SAPI's consent
- Not cancel the Direct Debit mandate
- Not provide false information
Plain English:
Run your business normally, stay solvent, keep SAPI informed of significant changes, and don't do anything that would prevent you from repaying.
7. Events of Default
What it says:
Circumstances that allow SAPI to demand immediate full repayment.
Common defaults:
- Failed to make collections as agreed (multiple failed Direct Debits)
- Provided false or misleading information
- Business enters insolvency, administration, or liquidation
- Breach of covenants (e.g., sold business without notice)
- Material adverse change (business fails significantly)
Consequences of default:
- Full balance becomes immediately due
- Additional interest/fees may apply
- Legal action may commence
- Personal guarantors (if any) become liable
8. Personal Guarantees
What it says:
Directors or owners personally guarantee repayment if the business cannot pay.
Plain English:
If your business defaults, SAPI can pursue you personally (your personal assets, property, bank accounts) for the outstanding balance.
Who signs:
- Typically all directors of limited companies
- All partners in partnerships
- Sole traders (automatically personally liable)
What you're guaranteeing:
- Full outstanding balance
- Interest and fees
- Legal costs if SAPI has to take action
Important: Personal guarantees are serious. Seek independent legal advice if unsure.
9. Security and Charges
What it says:
SAPI may take security over business assets.
Common security:
- Floating charge over business assets (for limited companies)
- Security interest in payment processor accounts
- Right to debit your bank account for collections
Plain English:
If you don't repay, SAPI has rights to collect from specific business assets or accounts.
10. Fees and Charges
What it says:
Additional fees that may apply beyond the standard repayment amount.
Common fees:
- Failed Direct Debit fees (£10-50 per failure)
- Late payment/arrears interest (daily or monthly rate)
- Legal costs (if SAPI has to take legal action)
- Administrative fees for forbearance arrangements
Plain English:
If you miss payments or enter arrears, additional costs apply. Avoid these by maintaining consistent repayments.
11. Termination and Settlement
What it says:
How and when the agreement ends.
Normal termination:
When the full Purchased Amount (e.g., £26,000) is repaid through collections.
Early termination:
You can request early settlement—SAPI provides a quote, you pay the settlement amount, agreement ends.
Default termination:
If you default, SAPI can terminate and demand immediate repayment of outstanding balance plus fees/interest.
12. Governing Law and Jurisdiction
What it says:
The agreement is governed by English law, and disputes are resolved in English courts.
Plain English:
If there's a legal dispute, it will be handled under English/Welsh law in UK courts.
Signing Your Agreement
Electronic Signature (DocuSign)
Most common method:
Receive email: "Please sign: Payment-linked Advance Agreement"
Click "Review Document"
Read the full agreement (don't skip—read every section)
Click "Continue" or "Next"
Sign electronically (type your name, draw signature, or use saved signature)
Click "Finish" or "Complete"
Receive confirmation email with fully executed agreement
All directors must sign:
If multiple directors, each will receive a signing link. Agreement isn't binding until all sign.
Paper Signature (Rare)
If electronic signing isn't possible:
1. SAPI posts paper agreement
2. You sign and date on signature pages
3. Return signed copies by post (keep one for your records)
4. Processing time: 5-7 business days
Cooling-Off Period (14 Days)
After receiving your funds, you have 14 days to cancel and return the money with no cost.
How to cancel:
1. Contact [email protected] with subject "14-Day Cancellation - [Account Reference]"
2. State you wish to exercise your 14-day cooling-off right
3. SAPI provides bank details and repayment instructions
4. Return the full advance amount within 14 days of receiving funds
5. Agreement is cancelled, no fees or interest charged
Important: You must return the FULL advance amount. If you've already spent it, you cannot use the cooling-off right.
Keeping Your Agreement Safe
After signing:
- Download a copy from DocuSign (click "Download" in confirmation email)
- Save to a secure location (cloud storage, local drive backup)
- Print a paper copy for your business records
If you lose your copy:
Contact [email protected] to request a duplicate. SAPI will email you a copy within 1-2 business days.
Amendments to Your Agreement
If terms change during your advance (e.g., top-up, forbearance arrangement):
Amendment agreement required:
- SAPI prepares an "Amendment and Restatement" document
- You sign electronically (same DocuSign process)
- New terms take effect once both parties sign
- Original agreement remains in place with amendments incorporated
Frequently Asked Questions
Q: Do I need a lawyer to review the agreement?
A: SAPI recommends seeking independent legal advice, especially if you're unfamiliar with commercial agreements or concerned about personal guarantees. You have 7 days to review—use this time to consult a solicitor if needed.
Q: Can I negotiate the terms?
A: Standard terms (advance amount, factor rate, repayment percentage) are based on SAPI's risk assessment and generally not negotiable. However, you can discuss concerns with [email protected]—occasionally adjustments are possible.
Q: What happens if I don't sign the agreement?
A: Your offer expires after 7 days, no funds are transferred, and no agreement is formed. You can decline with no penalty.
Q: Can I cancel after signing but before receiving funds?
A: Yes. Contact [email protected] immediately. As long as funds haven't been transferred, you can cancel without cost.
Q: What if I don't understand a section of the agreement?
A: Call +44 20 3868 4990 and ask to speak to someone who can explain. SAPI's team will clarify—don't sign anything you don't fully understand.
Q: Is the agreement the same for all customers?
A: The template is standard, but key terms (advance amount, factor rate, repayment percentage) are personalized to your business. Some clauses may vary based on risk profile.
Q: Can SAPI change the terms after I sign?
A: No. Once signed, terms are fixed unless both parties agree to an amendment in writing. SAPI cannot unilaterally change your factor rate, repayment percentage, or other core terms.
Q: Where can I find my signed agreement later?
A: Check your email for the DocuSign completion email, or request a copy from [email protected] anytime.
Need Help?
Agreement questions: [email protected] or +44 20 3868 4990
Legal advice: Consult an independent solicitor
Copy of agreement: [email protected]
Amendment questions: [email protected]
Need Help?
Email: [email protected]
Phone: +44 20 3868 4990
Business Hours: Monday-Friday, 9am-5pm GMT