Offering finance to customers: what the rules actually require
The question every dealer asks before they start. For most equipment and vehicle dealers the answer is simpler than expected: business asset finance is largely unregulated, so the question usually does not arise at all.
- Most business asset finance is unregulated business
- Where the line sits, and the cases that do need care
- Becoming an Introducer Appointed Representative
- The simplest route — let the broker carry it
If you sell equipment or vehicles, customers ask about spreading the cost constantly. The obvious response is to find a funder, put a payment option in front of people, and close more sales. The reason most dealers hesitate is that they have heard finance is regulated and they are not sure where the line sits.
Here is the part that surprises people: most business asset finance is not regulated. Finance to a limited company for business use sits outside the FCA consumer credit regime, and that covers the large majority of equipment, plant, machinery and commercial vehicle transactions. For a dealer selling to incorporated businesses, the regulatory question that has been putting you off largely does not arise.
There are edges where it does, and they are worth knowing rather than discovering. This page sets out both. It is general information rather than legal or compliance advice, and your own position depends on your customer mix — so confirm the specifics before acting on them.
Why most of this is unregulated business
The single distinction that decides it is who the customer is.
- Limited companies — unregulated. Finance to an incorporated business for business use is outside the FCA consumer credit regime. This is the bulk of equipment, plant and commercial vehicle finance, and it is why a great many dealers work with funders and brokers without ever holding a permission.
- Sole traders and small partnerships. These are individuals in law, not companies, and agreements with them can fall inside the regulated regime depending on the amount borrowed and the purpose. Broadly, business-purpose lending above £25,000 to an individual sits outside it, while smaller amounts may not. Check the current position rather than relying on a figure you read somewhere.
- Consumers. Finance to a private individual for personal use is squarely regulated, with a full set of protections and disclosure requirements attached.
So for a dealer selling to limited companies, this is unregulated business and the permission question does not arise. The place to pay attention is a customer base with a lot of sole traders and partnerships on smaller tickets — common in arboriculture, groundworks and owner-driver haulage. Worth knowing which side of that line your own customer mix sits on, and it is a question we can help you answer.
What counts as “arranging” finance
There is a real difference between mentioning that finance exists and arranging it, and the line is about how much you do rather than what you intend.
Handing a customer a broker’s phone number and stepping back is at one end. Discussing which product suits them, helping fill in an application, presenting monthly figures, or steering them toward a particular funder is a long way down the other. The further you move along that spectrum with a customer whose agreement is regulated, the more likely you are carrying out a regulated activity — credit broking — which requires either your own FCA permission or an appointment under somebody else’s.
Two things worth knowing:
- Being paid for it matters. Receiving a commission or fee for introductions makes it considerably harder to argue you were merely passing on a name.
- Advertising counts too. Putting “finance available” on your website, in a brochure or on a forecourt board is a financial promotion. Promotions have their own rules about being fair, clear and not misleading, and they generally need to be approved by an authorised firm.
This is the part dealers most often get wrong, usually by accident. A “finance from £X per month” banner is a financial promotion whether or not anyone thought of it that way.
What an Introducer Appointed Representative actually is
An Introducer Appointed Representative — IAR — is a firm appointed by an FCA-authorised principal to do one narrow thing: effect introductions to that principal, and distribute financial promotions the principal has approved. The IAR does not hold its own FCA authorisation. It operates under the principal’s, and the principal takes regulatory responsibility for what it does.
Where a dealer does want to introduce regulated business and be paid for it, this is the route. The appointment is made by the authorised principal — in our case Rural Finance Limited, the firm CW Asset Finance is itself an Appointed Representative of. We can introduce you into that conversation and support the application, but the appointment and the oversight sit with the principal.
For a dealer, it means:
- You can introduce customers and be paid for it, within the scope the principal sets.
- You are limited to introducing and to using promotions the principal has approved — you cannot advise on which product a customer should take.
- Your firm appears on the FCA Register as an appointed representative of that principal.
- The principal will want oversight: an agreement, some due diligence, and ongoing monitoring of what you say to customers.
It is a genuine commitment on both sides rather than a form to sign, and the FCA has tightened its expectations of principals supervising their appointed representatives in recent years. That is not a reason to avoid it — it is a reason to go in with your eyes open and to expect a principal who asks proper questions. A principal who does not ask any is the one to worry about.
In practice, here is how it works with us. We set you up with Rural Finance as the principal and support you through the appointment. From then on, you introduce the customer and we deal with the enquiry — the fact-find, the funder search, the underwriting conversation and the paperwork. You are not taking on a finance department. You are taking on a route to introduce business and be paid for it, with the work handled at our end.
The simplest route: let the broker carry the regulated part
For many dealers, the answer is not to take on a permission at all. It is to keep your own involvement genuinely light and let an authorised broker do the regulated work.
In practice that looks like: the customer says they need to spread the cost, you tell them you work with a broker and give them the contact, and the broker takes it from there — the fact-find, the product discussion, the application, the disclosures, the commission transparency. You stay in the sale, the customer stays yours, and the regulated activity sits with the firm that is authorised to carry it out.
That arrangement suits most dealers, and it is the one we would usually suggest first. Where a closer point-of-sale arrangement genuinely makes commercial sense, an IAR appointment can be the right answer — and we will talk you through what it would involve, including the appointment itself, before anything starts.
What we will not do is tell you it is a formality, or that you can pay for introductions without anyone thinking about permissions. That advice does the dealer no favours at all.
Common questions
Do I need to be FCA regulated to offer finance to my customers?
It depends on who your customers are and how involved you get. Finance to limited companies is generally outside the consumer credit regime, so a dealer selling only to incorporated businesses may not need a permission. Sole traders and small partnerships are individuals in law and agreements with them can be regulated depending on the amount and purpose of the borrowing. Separately, how far you go matters: passing on a broker’s details is different from discussing products, presenting figures or helping with an application. This is general information, not compliance advice, so confirm your own position before acting on it.
What is an Introducer Appointed Representative?
An IAR is a firm appointed by an FCA-authorised principal to make introductions to that principal and to distribute financial promotions the principal has approved. It does not hold its own authorisation — it works under the principal’s, and the principal is responsible for what it does. For a dealer it allows introductions to be made and paid for within a defined scope, but not advice on which product a customer should take. It involves an agreement, due diligence and ongoing oversight from the principal, and the firm is listed on the FCA Register.
Can I advertise “finance available” on my website?
Be careful here, because this is where dealers most often stray without realising. Promoting credit is a financial promotion, and financial promotions have to be fair, clear and not misleading, and generally need approving by an authorised firm. A “finance from £X a month” banner, a forecourt board or a brochure line all count. If you work with a broker, the practical solution is to use wording the broker’s principal has approved rather than writing your own. It costs nothing to ask and it removes a real risk.
Can I get paid for referring customers to a finance broker?
Potentially, but it changes the analysis rather than sitting outside it. Being paid for introductions makes it much harder to characterise what you are doing as simply passing on a name, and where the underlying agreements are regulated, paid introductions will usually require an appointment or permission. There are also disclosure obligations, because the customer is entitled to understand that a commission exists. Any broker offering to pay you for referrals without discussing permissions or disclosure is not protecting you.
What is the simplest way to offer finance without taking on regulation myself?
Keep your involvement genuinely light and let an authorised broker do the regulated work. You tell the customer you work with a finance broker and pass on the contact; the broker handles the fact-find, the product discussion, the application and all the disclosure and commission transparency. The regulated activity then sits with the firm authorised to carry it out, while you stay in the sale and keep the customer relationship. For most dealers this is the cleanest arrangement, and it is the one we would normally suggest before anything more formal.
Other sectors
Start a conversation
Tell us what you sell and the kind of deals you struggle to place. We will come back on whether we are a useful partner — and say so plainly if we are not.
Talk to us about a partnership
One reply, from Conor himself, usually the same working day.
CW Asset Finance is a credit broker, not a lender, and may receive a commission from the lender that funds an agreement. All finance is subject to status, affordability and lender approval. Nothing on this page is a quote or an offer of finance, and no outcome on any application is implied or promised. Any introducer arrangement is subject to the appropriate regulatory permissions being in place, which we will discuss with you before it begins. CW Asset Finance is an Appointed Representative of Rural Finance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630701).