UK FCA perimeter checker
The perimeter is not decided by whether you feel like a consumer. It is decided by what the borrower is, how much the credit is, what the money is for, and what the lender has taken security over. Those four settle it, and they are the four questions here.
Three separate tests get run together and answered as one. Whether the Consumer Credit rules apply is the first. Whether a charge over a home turns the deal into a regulated mortgage instead is the second — and it does not care that the money is for the business. Whether the Financial Ombudsman Service can take a complaint is the third, and it has nothing to do with either of the others.
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Nothing you type here is sent anywhere, stored, or seen by us. The answer is assembled in your browser from the statutes named beside it.
This tells you what the statute says, not what your agreement says
Whether a particular facility falls inside a definition depends on how the agreement is written, and that is a question for your own adviser. What this page can do is put the article in front of you with the date we read it, so you can check a lender's answer against the law rather than taking it on trust.
The four questions that decide it
| The borrower is | A credit agreement at all? | Why |
|---|---|---|
| Sole trader | Yes | A sole trader borrows as an individual, so the agreement is a credit agreement within article 60B(3). |
| Partnership of 2-3 | Yes | Article 60L defines a relevant recipient of credit as, among other things, “a partnership consisting of two or three persons not all of whom are bodies corporate”. |
| Partnership of 4+ | No | The definition in article 60L stops at three partners, so a partnership of four or more is neither an individual nor a relevant recipient of credit. |
| Unincorporated body | Yes | Article 60L also covers “an unincorporated body of persons which does not consist entirely of bodies corporate and is not a partnership”. |
| Limited company | No | A company is a body corporate. It is not an individual and not a relevant recipient of credit, so the agreement is not a credit agreement under article 60B(3) at all. |
| LLP | No | An LLP is a body corporate, so the same answer as a limited company: outside article 60B(3). |
Scroll the table sideways on a narrow screen. The definitions are in articles 60B and 60L, read in the original on 7 September 2026.
| Security taken | A regulated mortgage contract? |
|---|---|
| Unsecured or business assets | Not a mortgage question. The consumer-credit test is the one that decides it. |
| First charge on a home | Yes, where the credit is provided to an individual or to trustees and at least 40% of the land is a dwelling. Business purpose does not take it out; it changes which parts of the mortgage sourcebook apply. |
| Second charge on a home | Yes, on the same test — unless it is a second charge business loan: credit exceeding £25,000, ranking behind an existing mortgage, wholly or predominantly for business. |
| Commercial property | No, where it is an investment property loan: less than 40% of the land a dwelling for the borrower or a related person, and the borrowing for business. |
The mortgage test is articles 61 and 61A. It runs before the consumer-credit test, and it does not ask what the money is for.
What the £25,000 line actually attaches to
Not to your trading style. The exemption in article 60C(3) has two limbs, and it needs both: credit exceeding £25,000, and borrowing entered into wholly or predominantly for business. Borrow £25,000 exactly as a sole trader and you are inside, because the exemption asks for credit exceeding that figure. Borrow the same amount for a business you run through a company and the article never arises, because a company is not an individual and the agreement is not a credit agreement in the first place.
That is why incorporating changes the answer more than the size of the loan does. It is also why the declaration matters: the presumption that the borrowing is for business is created by the statement you sign, and it can be displaced where the lender knows or has reasonable cause to suspect otherwise.
A charge over a home is a different question
A first legal charge over a home, where at least 40% of the land is used as a dwelling, makes the contract a regulated mortgage contract when the credit is provided to an individual or to trustees. Business purpose does not take it out. What business purpose changes is the rulebook that then applies: the mortgage sourcebook applies unless the customer is a large business customer, and the firm may work to the tailored provisions for business-purpose contracts.
The Handbook Glossary puts a figure on that phrase. A large business customer is a client where the credit is for the purposes of a business with a group annual turnover of £1 million or more — group turnover, not the turnover of the borrowing entity on its own. MCOB 1.2.6G then tells the firm where to look for it: your annual report and accounts or your business plan, and it may rely on what you tell it about turnover unless it has reason to doubt it. That is the same shape as the business-purpose declaration one section up. A figure you supply about your own business is what moves the agreement from one rulebook to another, which is a reason to know what figure the lender has written down for you before you sign, not after.
Two carve-outs sit beside it, and both need the borrowing to be for business:
- a second charge business loan — a charge ranking behind an existing mortgage, with credit exceeding £25,000
- an investment property loan — where less than 40% of the land is a dwelling for the borrower or a related person
Either one takes the contract out of the mortgage rules. Neither says anything about the consumer-credit test, which still has to be run afterwards.
Outside the perimeter is not the same as no complaint route
The ombudsman applies its own size test. A business that clears the micro-enterprise or small-business thresholds can complain about a facility that no consumer-credit rule ever touched. A personal guarantor has a date test instead: the guarantee has to have been given on or after 1 April 2019.
So a lender who tells you that being outside the perimeter means there is nowhere to go is saying something the ombudsman's own page does not support. Ask which of the three tests they mean, and ask for the answer in writing. The regulation guide sets out the same boundary in prose, and the US side is a different question entirely — there the argument is about disclosure, not authorization.
What this checker does not know
It reads eleven articles, two Handbook provisions and one Glossary definition. Articles 60D to 60H used to be the gap in that list and are now read: the land exemption at 60D, the lender exemptions at 60E, the twelve-payment exemption at 60F, the low-cost exemptions at 60G including the 42.6 percent credit union figure, the high net worth declaration at 60H with its £60,260 threshold, and the qualification article 60HA. Only the first of those is settled by a question here; the rest are set out under the result so you can check them against your own agreement.
What it still does not know: whether your lender is authorized; what the FCA rules made under 60E(3) and 60H actually specify, which are Handbook rules and not articles of the Order; and how your agreement is drafted, which is what any of these definitions is applied to in the end. Treat a "no" here as a reason to ask a specific question, not as advice.
This page is part of business finance in the United Kingdom, where the rest of the UK material on this site is collected.
Sources
- The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, article 60B — entering into a regulated credit agreement as lender, and the definition of a credit agreement. https://www.legislation.gov.uk/uksi/2001/544/article/60B (checked 7 September 2026)
- Article 60C — exempt agreements, including the business exemption at 60C(3) and the declaration provisions at 60C(5) and (6). https://www.legislation.gov.uk/uksi/2001/544/article/60C (checked 7 September 2026)
- Article 60L — the definition of a relevant recipient of credit. https://www.legislation.gov.uk/uksi/2001/544/article/60L (checked 7 September 2026)
- Article 61 — the definition of a regulated mortgage contract, including the 40% dwelling test. https://www.legislation.gov.uk/uksi/2001/544/article/61 (checked 7 September 2026)
- Article 61A — contracts that are not regulated mortgage contracts, including second charge business loans and investment property loans. https://www.legislation.gov.uk/uksi/2001/544/article/61A (checked 7 September 2026)
- Article 60D — the land exemption, and the 40% dwelling test it turns on. https://www.legislation.gov.uk/uksi/2001/544/article/60D (checked 7 September 2026)
- Article 60E — exemptions relating to the nature of the lender. https://www.legislation.gov.uk/uksi/2001/544/article/60E (checked 7 September 2026)
- Article 60F — exemptions relating to the number of repayments, including the twelve-payment case at 60F(2). https://www.legislation.gov.uk/uksi/2001/544/article/60F (checked 7 September 2026)
- Article 60G — exemptions relating to the total charge for credit, including the 42.6 percent credit union figure at 60G(2). https://www.legislation.gov.uk/uksi/2001/544/article/60G (checked 7 September 2026)
- Article 60H — the high net worth exemption, including the £60,260 figure at 60H(1)(b)(ii). https://www.legislation.gov.uk/uksi/2001/544/article/60H (checked 7 September 2026)
- Article 60HA — the provision qualifying articles 60E and 60F. https://www.legislation.gov.uk/uksi/2001/544/article/60HA (checked 7 September 2026)
- FCA Handbook, MCOB 1.2 — application to regulated mortgage contracts for a business purpose, including the turnover evidence guidance at MCOB 1.2.6G. https://www.handbook.fca.org.uk/handbook/MCOB/1/2.html (checked 7 September 2026)
- FCA Handbook Glossary, "large business customer" — the group annual turnover figure that MCOB 1.2.3R(1) turns on. https://handbook.fca.org.uk/glossary/G1293 (checked 7 September 2026)
- Financial Conduct Authority, response to the FSB's super-complaint on personal guarantees for business loans. https://www.fca.org.uk/publications/corporate-documents/fca-response-fsbs-super-complaint-requiring-personal-guarantees-business-loans (checked 20 August 2026)
- Financial Ombudsman Service for small businesses, who we can help. https://sme.financial-ombudsman.org.uk/complain/can-help (checked 6 September 2026)
What changed on this page
8 September 2026 Correction — The UK checker used to put a sole trader borrowing £25,000 or less against commercial premises inside the consumer-credit perimeter. Article 60D exempts that agreement: where the borrowing is secured by a mortgage on land and less than 40% of the land is a dwelling for the borrower or a related person, the agreement is exempt, and the article carries no money threshold at all. So the £25,000 line in article 60C(3) is never reached in that case. The checker now says so, and says which article does it.
8 September 2026 New — Articles 60D to 60H of the Regulated Activities Order, and the qualifying article 60HA, have been read in the original and are now set out under the checker's result: the land exemption, the exemptions turning on who the lender is, the exemption for supplier credit repayable in twelve payments or fewer within a year without interest, the 42.6 percent credit union ceiling, and the high net worth declaration for an individual borrowing more than £60,260. The page used to say it had not read them.
7 September 2026 New — A UK perimeter checker was added. Six articles of the Regulated Activities Order were read in the original rather than in a summary: 60B(3) and 60L, under which a partnership of four or more members, an LLP or a company is not a borrower under a credit agreement at all; 60C(3), under which a business-purpose facility falls outside only when it exceeds £25,000, so a facility of exactly £25,000 is inside; 60C(5) and (6), under which a declaration of business purpose creates a presumption; and 61(3)(a) with 61A on mortgages. The checker answers whether the FCA perimeter reaches a facility, and answers separately whether the Financial Ombudsman Service could look at a complaint about it, because those are two questions with two different tests.
7 September 2026 New — The phrase large business customer now carries the figure behind it. MCOB applies to a regulated mortgage contract unless the customer is a large business customer, and the FCA Handbook Glossary defines that as a borrower whose business has a group annual turnover of £1 million or more. MCOB 1.2.6G says a firm looks at the turnover in your annual report and accounts or business plan, and may rely on what you tell it unless it has reason to doubt it. It is a turnover test on the group, and it is not the same test as the ombudsman's size limits.