What is credit broking? The FCA definition explained

The short definition

Credit broking is, in essence, introducing a customer to someone who will lend them money — or helping to arrange that finance — in connection with buying goods or services. It's a regulated activity under FCA rules, which means that if you do it by way of business, you generally need to be authorised by the Financial Conduct Authority (FCA) or to act as an "appointed representative" of a firm that is. The key thing to grasp: you don't have to lend any of your own money to be a credit broker. The introduction itself is the regulated activity.

What the FCA actually counts as credit broking

The legal definition (set out in article 36A of the Regulated Activities Order) is broader than most people expect. In practice it covers:

• Effecting an introduction of a customer who wants credit to a lender, or to another credit broker;
• Presenting or offering a credit agreement to a customer;
• Assisting a customer by carrying out preparatory work towards a credit agreement;
• Entering into a credit agreement on a lender's behalf.

For the vast majority of shops, garages and practices, it's the first limb that bites — simply introducing customers to a lender so they can pay over time. That's why so many ordinary businesses are credit brokers without thinking of themselves as anything to do with financial services.

Everyday activities that count

You're almost certainly carrying out credit broking if you do any of these by way of business:

• Let a customer pay in instalments through a finance provider;
• Offer "0% finance" or interest-free credit arranged through a lender;
• Have a finance application form, or an "apply for finance" button, at the point of sale;
• Recommend or refer customers to a particular lender or broker;
• Arrange hire purchase or PCP on a vehicle.

Doing it only occasionally doesn't get you off the hook — if it's part of how you do business, it counts.

What doesn't count — but check carefully

A few situations fall outside credit broking, but the exclusions are narrow and conditional, so it's risky to assume:

• Genuine cash-only sales where finance is never discussed, arranged, or referred.
• Lending your own money that the customer repays directly to you — that's a different regulated activity (consumer credit lending), not broking, and it usually needs full permission rather than limited.
• Specific exemptions — for example, the new merchant carve-out for buy now, pay later ("deferred payment credit") from 15 July 2026, and certain interest-free agreements repayable in a small number of instalments within twelve months. These come with conditions. The BNPL carve-out applies to merchants offering it as a payment method — the FCA's final rules kept in-home sellers exempt too — but businesses introducing other kinds of regulated credit face restrictions on which exemptions they can use, especially when selling in customers' homes.

"But I don't take commission — surely I'm not a broker?"

This is one of the most common misconceptions. Whether or not you earn commission does not decide whether you're a credit broker. The regulated activity is the introduction itself; being paid for it isn't the test. Plenty of businesses that introduce finance for free — or that actually subsidise an interest-free deal out of their own margin — are still carrying out credit broking and still need authorisation.

Which permission do you need to do it?

If credit broking is secondary to your main business — you mainly sell goods or services and offer finance to help customers buy them — you'll usually qualify for the simpler, cheaper limited permission. If credit broking is your main business, you'll need full permission. Our guide to limited permission vs full permission walks through the distinction.

Why it matters

This isn't a technicality. Carrying out credit broking without the authorisation you need — and without operating as an appointed representative — is a criminal offence. It can also make the credit agreements unenforceable and expose your business to FCA enforcement. Working out whether you're a credit broker is therefore the first question to settle before you offer finance.

What to do next

The sequence is simple: work out whether you're credit broking (this guide), then which permission you need, then prepare and submit your application. Our step-by-step guide to getting authorised covers the whole process, and we've written sector-specific guides for car dealers, retailers, dentists and clinics, vets and home-improvement firms.