Capital on Tap Preloading and Smart Repay: paying more than your limit

The short answer

Capital on Tap will not let a card payment go through if it takes you over your limit. no over-limit fee (the card is declined instead), but the transaction simply fails. If a bill is bigger than your available credit you have three options: preload your own money to cover the gap, split the bill into payments that each fit and repay between them, or ask for a higher limit. The first two work today. The third is slow and, in Capital on Tap’s own words, a manual review can lower your limit as well as raise it; the reasons are on our credit-limit page.

Smart Repay is the other half of the picture. It repays the card automatically, daily where your bank supports it, which frees up credit faster than a monthly Direct Debit and, on Pro, can earn a higher points rate. This page covers how each works, from Capital on Tap’s FAQ, its Preloading article and its Rewards Terms, and how we have used them.

What Preloading is

Capital on Tap’s card page puts it simply: “Preloading lets you top up your business credit card with your own money when you need more than your credit limit allows.” The FAQ adds that it increases “your total spending capacity beyond your credit limit”. You transfer money from your business bank account into your Capital on Tap account; it sits there as a preloaded balance; and card spending draws on it together with your credit line.

Two features make it different from paying the card off early. Preloading lets your available balance rise above your credit limit, which a repayment cannot do. And the money is held as e-money under a separate agreement, not as a credit balance on a loan account. That is why you have to sign an E-Money Facility Agreement first, and why Capital on Tap holds the permission it does: the FCA register entry behind its e-money activity is covered on our is Capital on Tap legit page.

What Preloading is not: credit. If the reason you wanted a bigger limit was to borrow, spreading a large cost over a few months, Preloading does not help, because you need the money in your bank account first. For that, compare the options in business credit card vs loan vs overdraft.

How to preload, step by step

The steps below follow Capital on Tap’s FAQ. Menu names can change, so if one has moved, search “Preloading” in the help centre.

1. Sign the E-Money Facility Agreement (first time only). In the portal go to Your Account, then Rates and Contracts, and sign it. If you joined after May 2024 it was part of your application and is already there; if you joined before, it is optional and needed only for Preloading.
2. Find your transfer details. Go to Payments, choose One-off payment details, then Transfer to Capital on Tap. The details shown are specific to your account.
3. Pay from the right account. Add the details as a payee in your business banking and send the amount. Capital on Tap’s Preloading article is firm on this: “Remember, you can only transfer from the bank account we have on file for you.” It also tells you to remove any old Capital on Tap payee details first, because older details can delay or misdirect the payment.
4. Check it has landed before you spend. Preloaded funds typically appear almost instantly (up to two business hours if a manual check is needed). Your available balance in the portal or app should rise by the amount sent.

Two practical checks before a big payment. Your own bank may cap how much you can send in one Faster Payment, which can matter more than anything Capital on Tap does. And if you are preloading to pay a supplier on a deadline, send the money early enough that a two-hour manual check would not make you late.

A worked example

Take our own limit, £12,000, and an illustrative supplier invoice of £20,000 that the supplier wants paid in one card transaction. The numbers are illustrative; the mechanics are Capital on Tap’s.

The whole £20,000 earns points, the payment arrives in the accounting feed as one line, and the credit part gets the normal interest-free treatment if you clear the statement in full. The cost is that £8,000 left your bank account on the day, not at the statement date. Preloading moves when you pay; it does not create money you did not have.

Protection and refunds

Preloaded money is e-money. Capital on Tap’s Preloading article says: “Capital on Tap is not a bank and your funds are not protected in the same way that a bank would protect your funds, instead we place these funds into a separate bank account that protects your money and allows its safe return to you in the event that Capital on Tap becomes insolvent or otherwise closes down.” The FAQ names Modulr as the authorised e-money institution that provides the infrastructure for Preloading and says customer e-money is segregated from Modulr’s own funds.

That is safeguarding, which is not the same as deposit protection. A bank deposit is covered by the Financial Services Compensation Scheme up to a limit; e-money is not, and the protection instead comes from the money being kept apart so it can be returned. For money that sits on the card for a day or two before a payment, that distinction rarely matters. For money left preloaded for months as a kind of float, it is worth knowing.

If you change your mind, the same article says: “If you change your mind about using Preloading, we can refund any unspent funds to your business bank account.” It suggests phoning 020 8962 7401. Our view is that the cleanest way to use Preloading is to send what a specific payment needs, spend it, and not leave a balance sitting there.

Points on preloaded spend

On the free card, preloaded spend earns exactly what credit spend earns. The Preloading article: “Get 1% cashback on every pound spent on your card, including your preloaded funds.” That is 1 point per £1, with each transaction each transaction rounded down to the nearest pound, redeemable as cash, balance credit, gift cards or airline and hotel points. Every earn and redemption rule is on our rewards page.

On Pro there is an uplift: 1.25% on preloaded spend (and Daily Repay via Smart Repay). It is one of the two ways Pro members earn more than the free tier on everyday spend, the other being Daily Repay, and it is central to the break-even maths on our Capital on Tap Pro page. Capital on Tap’s own Pro page puts the points needed to match the £299 a year fee at £23,920 of preloaded or Daily Repay spend at 1.25%, or £29,900 of ordinary credit spend at 1%.

Smart Repay: automatic repayments, weekly or daily

Smart Repay is Capital on Tap’s automatic repayment feature. The FAQ: “When you enroll in Smart Repay, our system automatically determines the most efficient payment method for your business.” In practice it uses one of two methods. If your bank supports Open Banking payments and your limit fits under your bank’s single-payment limit, repayments go by instant bank transfer, weekly or daily. Otherwise they go by weekly Direct Debit, which the FAQ says can take up to four business days to process.

A payment is only taken if there is a balance, and one due on a UK public holiday moves to the next working day. Set it up from the Payments section of the portal or app. If a run of payments fails and Smart Repay switches itself off, you can turn it back on in the portal.

For anyone running close to their limit, the useful part is speed. A monthly Direct Debit frees your credit once a month; daily Smart Repay frees it every weekday afternoon. If your spending is lumpy and your limit is modest, that is often the difference between a card that declines on day 20 and one that does not. It also means there is never a large statement balance to forget about, which is the main point of our guide to avoiding card interest. The daily option has a quirk worth knowing: because it needs your limit to sit below your bank’s Open Banking cap, a smaller limit is more likely to qualify than a large one.

The Pro Boosted Rate: what the Rewards Terms actually say

Capital on Tap’s marketing says 1.25% on preloaded spend (and Daily Repay via Smart Repay). The legal basis is clause 5 of the Rewards Pro terms, headed “Boosted cashback with Rewards Pro”. It says that if you make daily Smart Repay payments or preload funds, you “may be entitled” to earn points on “an alternative, more advantageous, basis”, which it calls the Boosted Rate, and that any Boosted Rate “will be set out in your Online Portal”.

For the daily Smart Repay route the terms set three conditions:

• Your business bank must support daily repayments by Open Banking variable recurring payments. Capital on Tap says it is not responsible if your bank does not, and can remove daily Smart Repay at its discretion.
• You must repay the balance in full, by daily Smart Repay or another method it offers.
• The Boosted Rate applies only to purchases made on the same business day you are on daily Smart Repay (or the preceding business day, if you opt in on a non-business day).

Two readings follow. First, the Boosted Rate is conditional and portal-defined; the “may be entitled” wording means the rate you see in your own portal is the one that counts. Second, there is no Boosted Rate on the free card at all. Free-tier customers get the benefits of Preloading and Smart Repay (headroom and faster repayment) but not a higher earn rate.

Splitting a bill instead of preloading

The other way to pay more than your limit is to split the bill. Pay part of the invoice on the card, repay the card, then pay the next part once the repayment has freed up credit. Nothing in Capital on Tap’s terms prevents this; it is ordinary card use and ordinary repayment.

Three things decide whether it works smoothly:

• The supplier has to accept part payments. Many will take an invoice in two or three card payments if you ask; some payment pages will not.
• The repayment has to land before the next payment. The FAQ says a Direct Debit is typically reflected by the end of the business day after the money leaves your bank. A manual debit card repayment (manual debit-card repayments up to £5,000) or an instant bank transfer through Smart Repay frees credit faster.
• Pending transactions still count. A hold or pending payment reduces available credit until it settles, so leave a margin rather than paying to the last pound.

Splitting has one advantage over Preloading: if you pay the first tranche on credit and settle it by the statement due date, you have used the interest-free window on that part. Its disadvantage is admin, several payments and several repayments for one invoice, which is why we preload for the bigger one-off bills.

What we do

Which to use when

For a payment to HMRC, check what HMRC accepts by card and what it charges before choosing any of these; our HMRC and suppliers guide covers that. And if you are weighing the whole card rather than one feature, the full review is where we set the limit against everything else.

Credit is subject to status and eligibility. Capital on Tap advertises rates as low as 13.86% APR (variable) and does not publish a representative APR; your rate depends on your personal and business credit history and the Bank of England base rate. Lender: New Wave Capital Limited (trading as Capital on Tap).