FCA-regulated lender
What it means to be authorised by the Financial Conduct Authority — and which SME lending activities sit inside vs outside the FCA perimeter.
Definition
An FCA-regulated lender (also called FCA-authorised lender) is a firm that holds permissions from the UK Financial Conduct Authority to carry on one or more "regulated activities" defined under the Financial Services and Markets Act 2000 (FSMA). For lenders, the relevant regulated activities are most commonly set out in the FCA's CONC sourcebook (Consumer Credit).
What activities sit inside the FCA perimeter
- Lending to individuals (consumer credit)
- Lending to sole traders and small partnerships (fewer than four partners) for amounts up to £25,000 where the agreement is wholly or predominantly for business purposes — these are treated as relevant credit agreements and need authorisation
- Credit broking (arranging credit between borrower and lender)
- Debt collection (where regulated credit was originally extended)
- Peer-to-peer lending platforms (separate permission regime)
What sits outside the FCA perimeter
- Pure B2B lending to incorporated bodies (Ltd, LLP, PLC) for any amount, for business purposes — generally exempt
- Asset-backed commercial finance with no consumer element
- Invoice finance and factoring to business customers (subject to specific exemption conditions)
- Lending above £25,000 to small partnerships where the agreement is wholly for business purposes
The line is often subtle. A lender that targets only Ltd companies for >£25k facilities can operate unauthorised. The same lender that takes one sole-trader loan under £25k for business purposes has just crossed the perimeter and needs authorisation.
How to verify a UK lender's FCA status
Use the FCA Financial Services Register. Every authorised firm has an FRN (Firm Reference Number), and the register lists current permissions, status, principals, and disciplinary history. This is the only authoritative source — claims on a lender's own website are not sufficient.
Why this matters for borrower-intent data
When sourcing borrower-intent data for a UK SME lender, the typical legal basis for processing personal data on directors (under UK GDPR) is legitimate interest. That basis is materially stronger when the data is being processed by an FCA-regulated lender with statutory consumer-protection obligations — courts and the ICO have treated regulated-lender legitimate interest as well-established.
Related
Frequently asked
Do all UK SME lenders need to be FCA-regulated?
No. Pure B2B lending to non-sole-trader businesses for business purposes generally falls outside the FCA consumer-credit perimeter. Lending to sole traders or small partnerships under £25,000 typically requires authorisation under CONC.
How do I check if a UK lender is FCA-regulated?
Use the FCA Financial Services Register at register.fca.org.uk. Search by firm name or FRN.
What FCA permissions does a typical SME lender hold?
Common permissions: entering into a regulated credit agreement as lender, credit broking, debt collecting, and where applicable debt administration.