FCA Regulation Status

Reality Finance are authorised by the Financial Conduct Authority. Our Firm Reference Number is 726717 . You may check this information on the FCA’s Register by visiting www.fca.org.uk/register

Understanding B2B Lending Regulations in the UK

If you plan to offer financing options to your business customers, it is crucial to understand the regulations surrounding B2B funding.

Please note that these guidelines do not apply to consumer funding.

B2B Lending Exemptions

B2B lending is exempt from FCA authorization. Businesses that extend credit exclusively to other businesses generally do not require FCA authorization. This exemption simplifies the financial transactions between businesses, fostering an environment where accessing credit is more straightforward and efficient.

Exceptions Requiring Authorization

Not all B2B lending scenarios are exempt from FCA oversight. There are specific exceptions where authorization is mandatory:

Sole Traders:

Definition:  Sole traders are individuals who operate their businesses independently.

Requirement: Lending to sole traders necessitates FCA authorization due to their individual status rather than being incorporated entities.

Small Partnerships:

Definition: Small partnerships are defined as partnerships with fewer than four partners.

Requirement: Financial transactions involving these smaller partnerships typically require FCA authorization to ensure regulatory compliance.

Unincorporated Associations:

Definition: Unincorporated associations are groups formed for a common purpose that lack legal recognition as entities.

Requirement: Lending to unincorporated associations also falls under FCA regulations, demanding authorization.

For more detailed information, you can refer to the FCA guidelines on exemptions and exclusions and the UK government’s regulations on offering credit to consumers.