People often assume that anyone who lends money is supervised by the Financial Conduct Authority (FCA) in exactly the same way. In practice, the rules depend a great deal on who is borrowing and why. The line between what the FCA regulates and what it does not is usually called the “perimeter”. Understanding where that line falls is the single most useful thing a company director can do before taking on any kind of finance, because it tells you which protections apply to a given product and which do not. This article explains the perimeter in plain terms and shows where our own business lending sits within it.
What the perimeter is
The FCA is the conduct regulator for financial services in the United Kingdom. Its powers come from the Financial Services and Markets Act 2000, usually shortened to FSMA. FSMA does not say the FCA regulates “everything to do with money”. Instead, it defines a list of specific activities that are regulated, and a firm needs FCA authorisation only if it carries on one of those activities. Activities on the list are inside the perimeter. Activities that are not on the list are outside it.
One of the most important regulated activities is consumer credit: lending to ordinary individuals. This is the area most people have in mind when they think of borrowing protections, because it covers things like credit cards, car finance and personal loans. The detailed rules for consumer credit live in the FCA’s Consumer Credit sourcebook, known as CONC.
Why a company borrower can sit outside it
The precise boundary for credit is set out in secondary legislation made under FSMA: the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, or FSMA RAO 2001. Article 60B of that Order describes the regulated activity of entering into a regulated credit agreement, and Article 60L defines the key terms it uses, including who counts as a borrower.
The structure of those provisions means consumer-credit regulation is built around lending to an individual. A limited company, or a limited liability partnership, is a separate legal person in its own right — a body corporate — not an individual. When the borrower is a body corporate and the borrowing is for business purposes, the agreement falls outside the consumer-credit activity in Article 60B. In short: the consumer regime exists to protect individual people, and our business lending sits outside it because the borrower is a company.
We think this is worth stating plainly rather than glossing over. We are not authorised by the FCA for consumer-credit lending, and we do not present ourselves as if we were. We lend to UK limited companies and LLPs for business purposes, to the company rather than to its director personally, and we do not take a personal guarantee.
What sitting outside the perimeter means for protections
Being outside the consumer-credit perimeter has real consequences, and honesty about them matters more than reassurance. Because this is not regulated consumer credit, the statutory consumer-credit protections do not attach to it. The Financial Ombudsman Service (FOS), the Financial Services Compensation Scheme (FSCS) and the Business Banking Resolution Service (BBRS) do not cover this product. If you ever needed to escalate a complaint beyond our own internal process, the final route is the courts rather than an ombudsman.
That does not mean a company borrower has no safeguards at all. General law still applies: contract law, the rules on unfair terms, data-protection law, and the duty to deal fairly and honestly. We also hold ourselves to standards we are not legally required to meet — you can read about those on our transparency page. But it would be wrong for us to imply that ombudsman or compensation-scheme cover exists here, and we will not.
How to tell where a product sits
If you are comparing finance options, the practical question is simple: is this lending to me as an individual, or to my company as a separate legal entity? The answer usually tells you which side of the perimeter you are on. A useful next read is our guide to regulated versus unregulated business loans, which walks through the distinction with worked examples.
For the amounts, terms and costs we currently offer, see our business loans page, and if you want to understand how we make lending decisions, see how we lend. The perimeter is not a loophole or a marketing point; it is simply the law deciding which rulebook applies to which kind of borrowing. Knowing which rulebook governs your finance is the foundation for everything else.
