HomeFWJ TakeawayResourcesWhat is regulated lending?

The difference between regulated lending and unregulated lending depends on the nature and purpose of the loan. When an individual is obtaining credit, the credit arrangement, or loan will be governed by the Consumer Credit Act 1974 and the Financial Services and Markets Act 2000.

Business finance agreements are not regulated if they meet various criteria, including:

  • where the loan agreement is a regulated mortgage contract or a regulated home purchase plan
    • the amount of credit provided exceeds £25,000; and
    • the borrower has entered into the agreement predominantly for the purpose of a business carried on or intended to be carried on.
  • if the loan relates to the purchase of land for non-residential purposes. The amounts due under such a loan agreement must be secured by a legal mortgage on land, not more than 40% of which is to be used as a dwelling by the borrower or a related person of the borrower.

For businesses who wish to provide commercial finance and don’t act under a regulatory scheme, it is important to establish lending criteria and conduct appropriate KYC investigations and customer due diligence so as to ensure the lending remains exempt from regulations.


The commercial finance team have a broad expertise in all aspects of banking and finance. Whether you are considering taking a business loan or providing commercial finance, contact Francis Wilks & Jones to discuss your options.

Contact us in confidence