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How business credit differs from consumer credit
Business credit and consumer credit look similar from the outside — money advanced now, repaid over time with a cost attached — but in law they sit in different worlds. The line between them is not about the size of the loan or the name over the door; it is about who the borrower is. Get that distinction right and a lot of confusion clears, including why a body-corporate-only lender like Credicorp says it sits outside the consumer-credit regime. This piece walks the regulatory line, explains what protections do and do not apply, and shows why the distinction matters when your company borrows. It is general information, not legal advice; take your own advice on your situation.
The line is the borrower
Consumer credit is, in essence, credit to individuals — natural persons borrowing in a personal capacity. The regime that protects consumers exists precisely because an individual borrower is often in a weaker position than a lender, and the law steps in to balance that. Business credit, by contrast, is credit to a business. Where the borrower is a body corporate — a limited company, an LLP or a PLC — the loan is a transaction between two organisations, and the consumer-protection machinery built for individuals does not apply.
In the UK, the regulated activity of lending under Article 60B of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 is concerned with credit agreements where the borrower is an individual (and certain small partnerships). Lending to a body corporate falls outside that. That is the precise, technical reason Credicorp can say its lending sits outside the FCA consumer-credit regime: the borrower is always a company, never an individual. It is a statement about the perimeter of a regime, not a claim to be authorised, registered or regulated by the FCA — which it is not, and does not need to be, for this kind of lending.
What protections do not apply
Being outside the consumer-credit regime means the specific consumer-credit protections do not attach to the loan. A company borrower does not get the consumer-credit cooling-off rights, the consumer-credit form-and-content rules, or access to the Financial Ombudsman Service in the way an individual consumer does. It is important to be plain about this rather than imply protections that are not there. A director should go in understanding that a business loan is a commercial contract between organisations, read on those terms.
What protections do apply
Outside the consumer-credit regime is not outside the law. A business loan is still a contract, governed by ordinary contract law and the general law that applies to any commercial dealing. Companies handling personal data are still subject to UK data protection law, including the rules on automated decisions that give a right to human review — which is why a Credicorp decision is reviewable by a person, as we set out in how a lender assesses affordability. And nothing stops a lender holding itself to high standards voluntarily. The honest position is that the protections come from a different place than they would for a consumer — contract, data law, and the lender’s own conduct — not from the consumer-credit rulebook.
Why this is a feature, not a gap
It would be easy to read “outside the consumer-credit regime” as a corner cut. It is not. The regime is built for a problem that does not arise here: protecting an individual borrowing for personal use. A company borrowing for its trade is a different situation, and the structural choices Credicorp makes are aimed squarely at keeping it that way. Lending only to incorporated businesses means the borrower is the company, not the director. Taking no personal guarantee means a company debt does not quietly become a personal one. And a hard 100% cost cap bounds the cost regardless. These are protections by design, matched to a business borrower, rather than borrowed wholesale from a regime built for someone else.
How to apply the distinction
For a director, the practical takeaways are short. Know that you are signing a commercial contract, not a consumer one, and read it as such — the cost in pounds, the term, what happens on late payment, how it ends. Do not assume consumer-credit protections are in play, and be wary of any business lender that implies the FCA consumer-credit regime when it does not apply. And use the public record to verify who you are dealing with, as our five-minute verification routine sets out. Clear-eyed beats reassured-but-wrong every time.
The honest summary
Business credit and consumer credit divide on the borrower, not the product. Consumer credit protects individuals; business credit to a body corporate sits outside that regime under Article 60B because the borrower is a company, not a person. That means the consumer-credit protections do not apply — a point to be plain about — while ordinary contract law, data law and a lender’s own conduct still do. Credicorp’s structural choices are designed for exactly this kind of borrower. Read a business loan as the commercial contract it is, and take your own advice on the specifics.