It can be a criminal offence
Carrying on a regulated activity such as credit broking without the right authorisation breaches the "general prohibition" in the Financial Services and Markets Act 2000. Doing so can be a criminal offence, punishable by up to two years' imprisonment and/or a fine. The law puts the onus on the business to be authorised before it starts — not to apply afterwards if someone notices.
Your finance agreements may be unenforceable
Agreements made through unauthorised credit broking can be unenforceable against the customer unless the FCA agrees they can be enforced. In practice that can mean finance you arranged is left in limbo, customers may be entitled to unwind agreements or recover what they paid, and the lenders you work with are exposed too. For a business that relies on finance to close sales, that's a real commercial risk, not a theoretical one.
The FCA can take action
The FCA has a range of powers: it can investigate, impose financial penalties, seek court injunctions and restitution, and publish details of the firms it takes action against. Even where the outcome stops short of prosecution, the disruption and reputational damage can be significant.
Your lenders will require it
Reputable lenders will only work with authorised firms. Operating without authorisation puts those relationships at risk — and losing your finance facility can quietly cost far more in lost sales than authorisation ever would.
None of this is meant to alarm — it's to make the case plainly. The fix is straightforward and far cheaper than the exposure: get authorised, then offer finance with confidence.
What to do if you think you're affected
If you're not sure whether you need authorisation, start with the free eligibility checker or read do I need an FCA licence to offer finance?. If it looks like you do need it, the sensible step is to take advice and get your application in. Our guide to getting authorised walks through the whole process, and we can prepare the application pack for you.