Offering credit to consumers: the law

You must be authorised by the Financial Conduct Authority (FCA) to offer credit to consumers.

Authorisation and rules you must follow

You must show you meet FCA’s minimum standards to be authorised. This includes ensuring your firm has a suitable business model and is well run by ‘fit and proper’ people.

Find out how to prepare for FCA authorisation.

You must follow rules for running your business and treating customers, including:

What you need consumer credit authorisation for

You must check if your firm’s proposed business means you need FCA authorisation to carry out regulated consumer credit activities such as:

  • selling goods or services on credit (including hire purchase)
  • hiring or leasing out goods for more than 3 months
  • lending money
  • issuing credit cards
  • arranging credit for other people
  • collecting or purchasing 
consumer credit debts
  • helping people with debt problems or advising on people’s credit standing

Any business offering credit or financing to customer must be authorised by FCA, not just credit specialist companies. This includes non-profit organisations.

Business to business lending

You don’t need to be authorised if you only offer credit to another business, unless your customer is:

  • a sole trader
  • a partnership with fewer than 4 partners
  • an unincorporated association

If you offer credit to these customers, you probably need to be authorised.