In the UK, lending to consumers is tightly regulated by the Financial Conduct Authority (FCA) under the consumer-credit regime. But not all lending is consumer lending. Where a loan is made to a business, for genuine business purposes, it can fall within an exemption from that regime. This is what people mean by the exempt business lending market.
Why the exemption exists
The consumer-credit rules are designed to protect individuals borrowing for personal reasons. A limited company taking finance to fund its trading is treated as a commercial party that does not need the same protections. Parliament drew that line so that genuine business borrowing is not weighed down by rules built for household credit.
How Credicorp fits
Credicorp is an exempt business lender. We lend only to UK limited companies and limited liability partnerships, and only for business purposes. We are the lender ourselves, not a broker who passes you on.
- We do not lend to individuals or sole traders.
- Our lending sits outside the FCA consumer-credit regime.
- That means the Financial Ombudsman Service and the Financial Services Compensation Scheme do not cover these agreements.
None of this removes our responsibility to lend fairly and transparently. It simply changes the regulatory framework around the agreement. The rest of this guide series explains what that means in practice.
See also: Regulated vs exempt business lending: what it means for you, Why doesn't the Financial Ombudsman Service apply to my complaint? and What protections apply when a loan is outside the FCA regime?.