Q&As

A loan is being used to pay off a mixture of business debts and personal debts and to put some of the money into a business as working capital. (A) will be lending £150,000 from his business partner as a personal loan, and it won't be paid back until after three years have passed, where it will either be paid back in a lump sum or a repayment schedule will be put into place. Over these three years, interest will be paid on the loan. Does this loan fall under the scope of the Consumer Credit Act 1974? If so what are the implications of this?

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Published on LexisPSL on 17/12/2015

The following Financial Services Q&A provides comprehensive and up to date legal information covering:

  • A loan is being used to pay off a mixture of business debts and personal debts and to put some of the money into a business as working capital. (A) will be lending £150,000 from his business partner as a personal loan, and it won't be paid back until after three years have passed, where it will either be paid back in a lump sum or a repayment schedule will be put into place. Over these three years, interest will be paid on the loan. Does this loan fall under the scope of the Consumer Credit Act 1974? If so what are the implications of this?
  • The regulation of consumer credit
  • Regulated Activities and consumer credit agreements
  • Loans which fall under the Consumer Credit Act 1974

The regulation of consumer credit

Regulation of consumer credit now sits with the Financial Conduct Authority (FCA). In consequence parts of the Consumer Credit Act 1974 (CCA 1974) were repealed from 1 April 2014 with regulated activities coming under the Financial Services and Markets Act 2000 (FSMA 2000) and the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) (RAO 2001).

Regulated Activities and consumer credit agreements

Entering into a regulated credit agreement as lender is a specified (regulated) kind of activity unless it is an exempt agreement under articles 60C to 60H of the RAO 2001 (discussed below). Information of regulated activities and agreements can be found in Practice Notes: Regulated activities relating to consumer credit and What is credit and

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