Limited permission vs full permission: which does your business need?

The two tiers, in a sentence

Limited permission is the lighter tier, designed for businesses carrying out lower-risk credit activities — typically where credit is secondary to a main non-financial business. Full permission is for everyone else: firms whose core business is credit, or who carry out higher-risk credit activities. Both are forms of FCA authorisation; the difference is the scope of what you're allowed to do, and how much scrutiny comes with it.

What limited permission covers

The FCA reserves limited permission for a defined set of lower-risk activities. The main ones are:

• Secondary credit broking — credit broking by a "supplier": a business whose main trade is selling goods or non-financial services, which introduces customers to a lender to help them pay. This is the big one. It covers car dealers, retailers, vets, dental and cosmetic clinics, gyms, opticians, home-improvement firms, jewellers and similar.
• Consumer hire — firms that only enter into consumer hire (rental or leasing) agreements.
• Not-for-profit debt advice — not-for-profit debt counselling, debt adjusting and credit information services.
• Interest-free supplier lending — a supplier lending to its own customers where the customer pays no interest or charges, and the agreement isn't hire purchase or conditional sale.

If your activity is on this list and is genuinely secondary to your main business, limited permission is almost certainly what you need.

What full permission covers

Full permission is for core or higher-risk credit activities. You'll need it if you:

• Lend as a main activity — personal loans, hire purchase, conditional sale, credit cards, overdrafts, store cards or pawnbroking.
• Broke credit as your main business — finance brokers and intermediaries whose core business is arranging finance for other people, rather than to support their own sales.
• Carry out commercial debt work — debt counselling, debt adjusting, debt collecting or debt administration on a for-profit basis.

Full permission firms must comply with the full set of FCA consumer credit rules, face more reporting, meet stricter threshold conditions, and pay higher fees — because these activities carry a greater risk of harm to customers.

The simple test

If you're weighing the two up, one question usually settles it: is offering credit secondary to a main business that sells something else — or is credit the business itself? If you'd still have a business without the credit activity, you almost certainly need limited permission. If arranging or providing credit is the main thing you do, expect full permission.

A trap worth avoiding: "limited" doesn't mean "light-touch forever"

It's easy to read "limited permission" as "fewer rules." That's only half true. The application is shorter and you'll generally submit fewer documents up front — but limited permission does not exempt you from the FCA's consumer credit rules. Those rules (set out in the FCA's "CONC" sourcebook) still apply, proportionately to your size, and you need to be able to evidence that you're following them — including around twelve months after approval, when the FCA may expect to see your compliance arrangements actually working. Treat limited permission as a lighter way in, not a way out of the obligations.

What each costs

There are two costs either way — the FCA's application fee, and the cost of preparing the application — plus a small annual fee once you're authorised.

• Limited permission — the FCA's application fee is lower, currently around £550. The FCA occasionally changes its fees, so check the current figure on its website. Ongoing fees and reporting are lighter too.
• Full permission — the application fee is higher and depends on the activities you're applying for and your consumer-credit income, often £1,500 or more. Ongoing fees and reporting obligations are also greater.

Applying for the wrong permission is a false economy: a mis-scoped application is one of the quickest ways to delay your authorisation, so it's worth getting the classification right before you pay anything. For a full breakdown of the costs, see our guide to how much a consumer credit licence costs.

What if my business changes later?

Your permission isn't fixed for life. If your activities change — say a retailer's finance offering grows into a standalone broking business — you can apply to change your authorisation through a Variation of Permission (a "VoP"), submitted through the FCA's Connect system. Moving from limited to full permission means meeting the full requirements and paying the full application fee. Equally, if you stop carrying out a regulated activity, you can vary or cancel the relevant permission so you're not paying for something you no longer need.

How to be sure which you need

The FCA publishes tools to help you scope your activities, and the categories above will point most businesses in the right direction. But the detail can be genuinely fiddly at the margins — and the cost of getting it wrong is real. If your business offers finance as a sideline and you're confident it's secondary, limited permission is very likely your route, and our step-by-step guide to getting authorised walks through the rest. If you're a specific type of business — a car dealer, for instance — it's worth reading the guidance for your sector. And if there's any genuine doubt about which tier applies, confirm it before you start your application.