When you apply, we verify the identity of the director who will sign and run anti-money-laundering (AML) and know-your-customer (KYC) checks. Some people read that as us being suspicious of them. It is the opposite: these are standard, every-applicant checks that protect honest businesses, and a clean applicant has nothing to fear from them. This article goes deeper than the practical steps and explains the why behind the checks, the evidence we accept, how Open Banking and document requests fit in, and how your data is protected. For the step-by-step of the identity check itself, see ID verification when you apply.
Why a lender has to know who is signing
A company cannot sign on its own; a real person, a director with authority, signs on its behalf. Before we lend, we have to be confident of two things: that the person in front of us genuinely is that director, and that they are entitled to commit the company to the agreement. Verifying the signing director is how we establish both. It is not a judgement on you — it is a baseline we apply to every applicant, in exactly the same way, before any money moves.
This matters most for you, the genuine director. The single easiest way for a fraudster to harm a real business is to impersonate one of its officers and take out credit in the company's name. A firm identity check is the wall that stops that. So when we confirm who is signing, we are protecting your company from being used by someone else as much as we are protecting ourselves.
What AML and KYC actually mean
"Know your customer" (KYC) is simply the work a lender does to confirm who its customer is and who stands behind the business. "Anti-money-laundering" (AML) is the broader duty to make sure lending and repayment are not being used to disguise the proceeds of crime. In practice the two overlap, and for a short-term business loan they come down to a small, proportionate set of checks:
- Confirming the company is real and current — that the limited company or LLP exists, is active on Companies House, and is the entity actually applying.
- Confirming the people behind it — verifying the signing director's identity and, where relevant, understanding who ultimately owns or controls the company.
- Sense-checking the purpose and the money — that the borrowing is for a genuine business purpose and that the company's banking behaviour is consistent with a real, trading business.
These are obligations every responsible lender carries. They are not a credit decision and not a character test; they are about establishing facts. A business loan to a company for business purposes sits outside FCA consumer-credit regulation under Article 60B FSMA RAO 2001, but the duty to run identity and AML checks still applies — it is part of operating as a legitimate lender, not a sign you are being treated as a regulated consumer.
Every applicant goes through the same identity and AML checks, in the same order, whether their application is strong or borderline. Being asked to verify your ID, or to supply one more document, does not mean we suspect you of anything — it means we are doing for you exactly what we do for everyone. The vast majority of checks pass quietly in the background.
What evidence is acceptable
Most of the identity check is satisfied with a single current, government-issued photo ID for the director who is signing:
- A valid passport, or
- A current UK photocard driving licence.
Alongside the photo ID, we may need to confirm the document genuinely belongs to you, sometimes with a quick photo or short liveness step taken on the spot, and confirm that you are authorised to borrow on the company's behalf. Occasionally — for example if a detail does not match, or for proof of address — we will ask for one supporting item such as a recent utility bill or bank letter showing your name and address. The test for any document is simple: it should be current, unedited, and readable in full. For exactly what to have ready before you start, see what documents you need to apply.
How Open Banking and document requests fit in
Identity is only one strand. To confirm the business is genuine and that the loan is affordable, we also need to see how the company's account behaves — and there are two routes to that, both of which sit inside the AML picture rather than alongside it.
- Open Banking gives us read-only access to roughly the last six months of the company's transaction activity, authorised by you through your own bank's secure login. It lets us read the account to confirm genuine trading and assess affordability; it never lets us move money. It is faster and safer than sending statements around, which is why most applications use it. The detail is in how we verify your company's bank statements with Open Banking.
- A document request is the fallback or follow-up route. If you would rather not connect your bank, you can upload statements instead; and if a single detail needs confirming on your specific case, we will ask for that one item. When that happens, send it the safe way through your portal — see how do I send you a document you've asked for. A request like this is a normal part of completing the checks, not a red flag.
Whether the company's banking comes to us by Open Banking or by upload, it serves the same KYC purpose: confirming that a real, trading business is borrowing for a real, business reason.
What these checks are not
It is worth being precise, because this is where worry creeps in. The identity and AML checks we run are not a personal consumer credit search, and they do not appear on, or affect, your personal credit file. Confirming who you are is a different thing from assessing how you manage credit. The credit assessment we do run is on the company, through business credit reference agencies — not on you as an individual. And because we lend to the company and take no personal guarantee, none of this puts your personal assets on the line.
How your data is protected
The information you share for these checks is sensitive, and we treat it that way. We use it only to verify your identity and complete the checks we are required to make — not for anything unrelated — and we hold it on secure UK-based systems with strict, logged access controls and encryption in transit. We keep it only for as long as our purpose and record-keeping obligations require, then no longer. For the full picture of the safeguards, see how do you keep my information secure.
A genuine check happens inside your application and portal. We will never ask you to email your ID to a personal address, to pay a fee to "release" or "unlock" a loan, or to share your banking password, PIN or a one-time security code — Open Banking is authorised at your own bank and never needs your credentials handed to us. If anyone asks for any of these, it is a scam: stop, and check by signing in to your portal directly.
Where it fits in your application
Identity and AML checks run in parallel with confirming your company and assessing affordability — they are one part of getting to a decision, not a separate hurdle bolted on. Most clear straightaway; a small number need a second look or one more document, which is routine. Once everything is confirmed and we can lend, you will see your Key Information Sheet (KIS) — the amount, term, total cost of credit and full repayment schedule — before you sign the Business Loan Agreement. As this is lending to a company for business purposes under Article 60B FSMA RAO 2001, it is not covered by the Financial Ombudsman Service or the FSCS.
See also: What happens after you sign the Business Loan Agreement, Applying as a newly incorporated company, The Business Purpose Declaration: what you're signing.