Consumer credit authorisation is the FCA permission a business needs to carry on credit activities with individuals, sole traders and small partnerships in the UK. The FCA took over the regime from the Office of Fair Trading on 1 April 2014. The rules sit in the Financial Services and Markets Act 2000, the surviving parts of the Consumer Credit Act 1974, and the FCA's Consumer Credit sourcebook (CONC).
The old Office of Fair Trading licence no longer exists. Firms now hold a Part 4A permission that lists their credit activities, and the permission does not expire: it continues for as long as the firm meets the FCA's standards and pays its annual fees. People still call it a consumer credit licence, and the firm's consumer credit licence service uses that term.
Authorisation is needed for any of the following activities carried on by way of business with UK consumers.
| Activity | Examples |
|---|---|
| Lending | Personal loans, credit cards, overdrafts, motor finance, retail finance, pawnbroking, high-cost short-term credit, buy now pay later from third-party lenders |
| Credit broking | Car dealers, home improvement firms, online lead generators and comparison sites introducing customers to lenders |
| Consumer hire | Car, tool and equipment hire for more than three months |
| Debt adjusting and debt counselling | Debt management plan providers and advice services |
| Debt collecting and debt administration | Collection agencies, debt purchasers and firms administering loan books |
| Credit information | Credit reference agencies and credit information services |
| Operating an electronic lending system | Peer-to-peer lending platforms |
The perimeter is wide, and businesses outside financial services are often inside it: a retailer offering finance at the till, a dealer arranging car finance or a website passing leads to lenders. Some agreements are exempt, for example interest-free credit from the supplier of the goods repayable in 12 or fewer instalments within 12 months, and lending to businesses for more than £25,000. Confirming the position against the FCA's Perimeter Guidance manual is the first step.
A credit broker does not always need its own permission. It can become an appointed representative of an authorised principal firm, which takes regulatory responsibility for the broker's activities and must oversee them under the FCA's appointed representative rules. This suits businesses that broke credit as a small part of their sales and want to start quickly; firms that broke at scale, or want control over their own lender panel and compliance, usually apply directly. The firm's article on the FCA appointed representative regime explains the principal's obligations.
Deferred payment credit, the legal term for buy now pay later, became regulated on 15 July 2026 where a third-party lender provides it. Lenders need full consumer credit permission to enter into new agreements; those that registered for the FCA's temporary permissions regime before the window closed can continue while they apply. Retailers offering it are credit brokers and need the matching permission.
The FCA sorts consumer credit firms into two groups, and the choice is made when the application is started on Connect. The application process is the same for both, but limited permission firms face fewer threshold conditions and lighter ongoing requirements.
A firm already authorised for other activities, such as an insurance or mortgage broker, is a full permission firm whatever its credit activities. The FCA's page for consumer credit lenders and hirers lists the points that move a firm into full permission.
A used car dealer introduces customers to three motor finance lenders and receives commission from them. Selling cars is its main business and credit broking only helps customers pay for them, so it applies for limited permission at a fee of £560. If the dealer later starts lending from its own balance sheet with interest, or opens a separate finance-broking website as a business in its own right, it needs full permission and applies for a variation of permission.
Every applicant must meet the threshold conditions: a UK head office for a UK company, a structure the FCA can supervise, appropriate resources, suitable people and a viable business model. For consumer credit the FCA looks particularly at how the firm will treat borrowers.
Consumer credit firms are under the Senior Managers and Certification Regime (SM&CR). Limited permission firms are limited scope firms, with fewer senior management functions; most full permission firms are core firms. The directors and senior managers are approved by the FCA, and they need direct experience of the credit activity applied for. The firm's SM&CR guide explains which functions apply.
Payday and other high-cost short-term lenders apply under the full permission route with additional expectations. The price cap in CONC 5A limits interest and fees to 0.8% a day, default fees to £15, and the total cost to 100% of the amount borrowed. Applicants show how they comply with the cap and with the rules on continuous payment authorities, which allow a lender to collect repayments from a customer's card.
The FCA charges a one-off application fee by type of activity, paid on Connect at submission and not refunded if the application is withdrawn or refused. The categories are set in FEES 3 Annex 1 of the FCA Handbook and the amounts on the FCA's application fees page (updated 13 July 2026).
| Activities | Category | Fee |
|---|---|---|
| Limited permission | 2 | £560 |
| Credit broking; credit information services; debt adjusting and counselling without debt management plans | 3 | £1,130 |
| Mainstream, motor and retail finance lending; consumer hire; debt collecting; debt administration; peer-to-peer platforms | 5 | £5,640 |
| High-cost short-term credit; home credit; bill of sale loans; debt management; credit references | 6 | £11,260 |
Not-for-profit debt advice bodies applying for limited permission pay no fee. Where a firm applies for activities in more than one category, it pays the highest. After authorisation the firm pays annual periodic fees based on its consumer credit income, plus the Financial Ombudsman Service levy.
Most consumer credit firms have no fixed minimum capital. The FCA instead assesses whether the firm has adequate financial resources for its business plan, including a lender's funding lines and the cost of running the firm while the loan book grows. Debt management firms and peer-to-peer platforms have specific prudential requirements, in CONC 10 and in the FCA's prudential rules for those platforms.
The Financial Services and Markets Act 2000 gives the FCA 6 months to decide a complete application and 12 months from receipt to decide an incomplete one. Since January 2026 the FCA has measured itself against shorter targets, published in its authorisation targets.
| Measure | Complete | Incomplete |
|---|---|---|
| Statutory maximum | 6 months | 12 months |
| FCA target for new firms | 4 months | 10 months |
| FCA median for all new firms, Q1 2026/27 | 131 days | Not applicable |
Limited permission applications and credit broking applications from established businesses are usually at the shorter end. Lenders, debt management firms and high-cost credit providers receive closer review of affordability models and customer journeys, and take longer. The largest factor the firm controls is the completeness of the application and the speed of its answers to the case officer.
The FCA treats non-disclosure seriously: an applicant must answer every question honestly, including about past disputes, removal from lender panels and adverse history. The firm's guide to applying for FCA authorisation covers the threshold conditions and the decision process in more depth.
| Document | What it shows the FCA |
|---|---|
| Regulatory business plan | Products, customers, distribution, funding, competitors and how the firm makes money |
| Financial forecasts | Three years of profit and loss, balance sheet and cash flow, with arrears and default assumptions for lenders |
| Affordability and credit risk policy | How each customer's ability to repay is tested, with the data sources used |
| Arrears and forbearance policy | How customers in financial difficulty are identified and supported |
| Financial promotions procedure | Who approves adverts and how they meet CONC 3 |
| Complaints procedure | Handling within the DISP time limits and referral to the Financial Ombudsman Service |
| Compliance monitoring plan | What will be tested, how often and how results reach the board |
| Consumer Duty framework | Target market, fair value assessment, communications testing and outcome monitoring |
| Anti-money laundering policy | Customer due diligence and suspicious activity reporting proportionate to the products |
| People and controller forms | The fitness and propriety of directors, senior managers and owners |
Each document should be written for the firm's own products and customers. The FCA reviews only final versions approved by the board, and inconsistencies between the business plan, forecasts and policies are the most common source of follow-up questions.
Brokers set out which lenders they work with, how they choose them, how commission is paid and how it is disclosed to customers. The FCA expects brokers to show that commission arrangements do not lead them to steer customers towards more expensive credit, and that their promotions name the lender and the broker's role clearly. Online lead generators also explain how they pass customer data to lenders and with what consent.
Lenders give the most detailed applications. The FCA asks for the funding structure and its terms, the target market, product features and fees, the distribution channels, and the policies on credit risk, affordability, arrears and monitoring of lending data. Motor finance providers also explain how they select and oversee brokers, and retail finance providers how they select retailers.
Debt management firms handle money for customers in financial difficulty and face the closest scrutiny. They show how they assess whether a debt management plan suits the customer, how fees are set, how client money is held and how vulnerable customers are supported. Debt collectors and debt purchasers explain their collection practices, contact limits and the treatment of disputed debts.
Operators of electronic lending systems explain how they assess borrowers, how they present risk to lenders on the platform, their wind-down arrangements for the loan book and how they meet the financial resources requirements for platforms.
Selling payment protection or other insurance alongside credit needs an insurance distribution permission, and secured lending on a home is regulated as home finance under a separate permission. Both can be applied for in the same application.
Authorisation brings continuing duties from the first day of trading.
The FCA supervises consumer credit closely, with recent attention on affordability, the treatment of customers in arrears, high-cost credit and credit broking. Firms that keep their affordability models, arrears data and Consumer Duty evidence current find supervisory contact straightforward.
FCA authorisation covers UK customers. A firm lending to consumers in other countries needs to meet each country's own licensing rules; UK firms lost EU passporting rights on 31 December 2020. An overseas company can be authorised for UK consumer credit, normally through a UK establishment with management in the UK.
Firms can trade under a brand different from the legal entity, provided the trading name is registered with the FCA and disclosed to customers. Online and app-based lending and broking are regulated in the same way as face-to-face business, with additional attention to how affordability checks, disclosures and consents are presented on screen. Outsourcing is allowed, but the authorised firm remains responsible for the outsourced activity.
The FCA must decide a complete application within 6 months and an incomplete one within 12 months. Its target since January 2026 is 4 months for a complete application, and limited permission and broking applications are usually quicker than lending.
The 2026/27 FCA application fee is £560 for limited permission, £1,130 for credit broking, £5,640 for mainstream lending and debt collection, and £11,260 for high-cost credit, debt management and credit references.
No. FCA authorisation does not expire, but the firm must keep meeting the threshold conditions, submit its returns and pay its annual fees.
Not for most firms. The FCA assesses whether financial resources are adequate for the plan; debt management firms and peer-to-peer platforms have specific prudential requirements.
Often not. Supplier credit with no interest or charges, repayable in 12 or fewer instalments within 12 months, is exempt; interest-free credit outside that exemption usually needs limited permission.
Yes. A dealer that introduces customers to motor finance lenders is carrying on credit broking and normally needs limited permission, or full permission if broking is its main business.
No. Authorisation belongs to the firm; a buyer acquires the authorised company and needs FCA change of control approval before completion.
Yes. Deferred payment credit from third-party lenders has been regulated since 15 July 2026, and lenders need full consumer credit permission or a temporary permission.
Buckingham Capital Consulting has obtained FCA authorisations since 2013 and prepares consumer credit applications for lenders, brokers and debt firms, from the regulatory business plan and forecasts to the affordability, arrears and Consumer Duty policies. The firm confirms the right permission at the outset and manages the FCA's questions through to authorisation and the first year of reporting.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.