Ask Sterling
Two lines from Sterling first, then the detail. If your question isn't here, the answer is usually in one of the finance guides.
- What is a factor rate, and why does it look so cheap?A factor rate is the number you multiply the advance by to get what you pay back: £10,000 at 1.35 means £13,500. It looks like 35%, but over six months of daily payments it works out at about 126% APR.Read the answer
- How do I turn a factor rate into an APR I can compare?You need three numbers: what lands in your account, what you pay back in total, and how often you pay. Put them through the calculator and a 1.35 over six months comes out at about 126%, not 35%.Read the answer
- Is a merchant cash advance actually a loan?No. A merchant cash advance is a sale of part of your future takings at a discount, so there is no interest rate and it is not FCA-regulated. The money still has to come back, and it still has a real cost you should convert to an APR.Read the answer
- How much can my limited company actually borrow?The honest answer is: as much as your monthly takings can comfortably repay, not as much as you would like. Start from what the business can hand back each week and work backwards.Read the answer
- Will asking about finance affect my credit score?Asking me does nothing to your credit file, because Ask Sterling never runs a credit search. If our funding partner or a funder searches later, ask them first whether it is a soft or a hard search.Read the answer
- What documents will a funder want from my company?Bank statements, filed accounts, ID for the directors, and something recent showing how this year is going. Have them in one folder before anyone calls and you save yourself a week of back and forth.Read the answer
- How quickly can my company actually get the money?Anyone who promises a time before they have seen your bank statements is guessing. The fastest route is a short product, a clean file and a complete document pack on day one.Read the answer
- What is a holdback, and how does it change my repayments?The holdback is the slice of each day's card takings the funder keeps until the advance is repaid. It flexes with your sales, which is its whole point, but the total you repay does not flex at all.Read the answer
- Can I take a second cash advance while one is still running?You can, but two advances means two slices out of the same takings, and that is where good companies come unstuck. Add the repayments together before you add the money together.Read the answer
- Can I repay a cash advance early, and will it save me anything?You can usually repay early, but on most advances you still owe the full fixed total, so you save nothing. Ask for an early settlement discount in writing before you sign, not after.Read the answer
- Should my company take a cash advance or a revolving credit facility?A cash advance is one lump sum with a fixed price, repaid from takings. A revolving credit facility is a limit you dip into and only pay for what you use, so for a gap that keeps coming back it is usually the better tool.Read the answer
- Does my company need security to borrow?Not always: plenty of business finance is unsecured on the company's assets. But unsecured rarely means no strings, because the funder often asks the director for a personal guarantee instead.Read the answer
- What is a personal guarantee, and what am I really signing?A personal guarantee is you promising to pay the company's debt if the company cannot. It quietly takes away the limited liability you set the company up for, so read every word and get advice before you sign.Read the answer
- Will a CCJ stop my company getting finance?A CCJ in the last 12 months will stop most of the funders I know, and applying anyway just adds a refusal to the file. Pay it, get it marked, and pick your moment.Read the answer
- My bank said no. Why, and what now?A bank no usually means 'not on our terms', not 'never'. Find out which box you did not tick, because that decides whether the answer is to fix something or to go somewhere else.Read the answer
- Is business finance for my limited company regulated by the FCA?For a limited company, mostly no: the FCA's credit rules are built around individuals and small partnerships, not companies. That means fewer protections, so the checks you would expect a regulator to make are yours to make.Read the answer
- What is a debenture, and why does the funder want one?A debenture is the document that gives a funder a charge over your company's assets, usually all of them. It is registered at Companies House, so anyone can see it, and it gives the funder a route to those assets if the company cannot repay.Read the answer
- How do I refinance a cash advance that is squeezing my cash flow?Refinancing means a new facility pays off the old advance, so you have one repayment instead of a squeeze. It only helps if the new money is longer and cheaper, because on most advances you still owe the old fixed total.Read the answer
- Daily or weekly repayments: which is better for my company?Weekly is slightly cheaper in APR terms and much easier to plan around, because you are not watching the account every morning. Daily only makes sense if your takings land daily and the funder will not offer weekly.Read the answer
- Why can't Ask Sterling help sole traders or partnerships?Because introducing a sole trader or small partnership to finance is regulated credit broking, and Ask Sterling is not authorised to do it. That is our rule, not a judgement on your business.Read the answer
Ready for a straight answer?
Two minutes of questions. One funding specialist. No impact on your credit score.