Business lending and personal credit may look similar on the surface — a company borrows money and repays it over time — but the two operate under fundamentally different rules, and the differences matter to every director who borrows on behalf of their company.
The regulatory boundary
Personal credit in the UK is regulated by the Financial Conduct Authority under the Consumer Credit Act 1974. Lenders in that market must follow strict rules around affordability, cooling-off periods, and mandatory disclosures. Business lending to limited companies and LLPs is outside that regime entirely. Lenders are assessed on FCA exemption criteria rather than full authorisation for consumer credit.
Who carries the obligation
In a business loan, the borrower is the company — a separate legal entity from its directors and shareholders. The loan does not appear on any director's personal credit file, and the director does not sign a personal guarantee with Creditcorp. This is materially different from many high-street small business loans, where a personal guarantee from the director is standard. The company's ability to repay is assessed on the company's own merits.
Protections that do and do not apply
Because business lending sits outside the consumer-credit regime, the Financial Ombudsman Service and the Financial Services Compensation Scheme do not cover disputes or losses arising from these facilities. Businesses are expected to take independent advice where needed, and the contractual terms of the facility are governed by commercial contract law.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Why trading history matters to business lenders, How a business lending decision is actually made.