®
"Regulated" and "unregulated" are among the most consequential words in business lending, and among the least explained. Whether a loan is regulated decides which legal protections you get if something goes wrong. Here is the dividing line, what protections apply on each side, and why we publish our terms openly even though our lending is not regulated as consumer credit.
The dividing line
Most UK consumer-credit regulation exists to protect individuals. The key test is in Article 60B (read with the definitions in Article 60L) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (FSMA RAO 2001). In broad terms, a credit agreement is regulated when it is made with an individual or a "relevant recipient of credit".
A limited company or LLP is a body corporate, a separate legal person in its own right, so it does not count as an individual for this purpose. So a loan made to a company for business purposes generally falls outside that consumer-credit regime. This is not a "Consumer Credit Act exemption" — that statute governs consumer credit, which a loan to a company is not. The point is simpler: a company is not the kind of borrower the consumer rules are designed to protect.
It is not just about the borrower
Being a company is necessary, but the purpose of the borrowing matters too. The lending sits outside the consumer regime where it is for a wholly or predominantly business purpose. That is why you sign a declaration confirming the loan is for the business. A company borrowing for a director's personal spending would not fit the picture — and we would not lend for that.
What protections apply — and what don't
On a regulated consumer-credit agreement, an individual borrower gets a suite of statutory protections and, importantly, access to the Financial Ombudsman Service (FOS) if they have an unresolved complaint, plus certain Financial Services Compensation Scheme (FSCS) protections in defined circumstances.
On an unregulated business loan like ours, those consumer protections do not apply. This product is not covered by the FOS, the FSCS, or the Business Banking Resolution Service (BBRS). If you have a complaint, it goes through our internal complaints process; if it cannot be resolved that way, the final escalation is the courts, not an ombudsman. We explain exactly what those bodies are, and why business loans usually fall outside them, in what FOS and FSCS cover.
We say this plainly because you deserve to know what is and is not behind the borrowing. The absence of the consumer safety net is a real difference between an unregulated business loan and a personal loan.
Why we publish transparency anyway
Not being regulated as consumer credit does not mean operating in the dark. We take the view that fewer external protections make our own transparency more important, not less. So we voluntarily set out our terms, our costs and how we treat customers in difficulty, and we show every figure — amount borrowed, term, total amount payable, total cost of credit, a simple annualised rate and the full repayment schedule — on your Key Information Sheet (KIS) before you sign. You can see how we approach this on our transparency page.
We also follow fair processes for customers who fall into difficulty, signpost free independent debt advice, and let you verify the company itself on the public register. We do all of that voluntarily, since no rule obliges an unregulated lender to publish any of it, and we think it is the right way to lend.
What to do with this
If your company is considering a business loan, check whether it is regulated, and if it is not, understand which protections you are giving up. Then judge the lender on how openly it behaves anyway: are the full costs shown before you sign, is there a clear complaints route, and are customers in difficulty treated fairly? Regulation is only one safeguard, and on an unregulated loan a lender’s own conduct matters all the more.