Here’s a checklist of the main things you need to do before applying to FCA for authorization.

  • Have ready your National Insurance or passport number (for sole traders and any approved persons).
  • Have ready any relevant business documents, such as draft agreements, pre-contract information, promotional literature, and website screenshots.
  • Calculate the highest projected amount of client money (if your firm holds this) and consumer credit income expected over the next 12 months.
  • Establish the regulated financial activities you will carry out.
  • Have ready your employment history for the past 5 years, residential addresses for the past 3 years and details of significant events for each approved person.
  • Have ready details of partners, shares, subordinated loans or other external funding.
  • Have ready an understanding of who will be the firm’s approved persons and how your firm will manage risks from money laundering and money laundering reporting officer (if applicable).
  • Prepare a business plan.
  • Complete the IT self-assessment questionnaire

Many applications for authorization are delayed because the business plan is not detailed enough. Here are some things to include

  • Your business with existing customers and why your firm wishes to carry out regulated activities
  • Whether your firm has identified a business opportunity or customer base
  • Where customers will be sourced from with details of any lead generators or brokers
  • Services (both regulated and non-regulated) your firm will sell as well as the areas you specialize in
  • Experience your firm’s governing body or senior management have of the regulated activities you wish to carry out
  • Background and experience of everyone performing significant influence controlled functions (including their employment background and copies of relevant qualifications/examinations)
  • Your long-term strategy as well as your plans for financial
  • Fees and how they are explained to the customer
  • Promotions and communications, including how they comply with CONC 3

Please include in your business plan:

  • Summary of your firm’s positioning in the credit market and how your products compare to competitors
  • Summary of any security or guarantees your firm has and how customers are notified of this
  • How your deal with customers who are in arrears on their repayment (including methods of contacting the customer, assessments of whether they are in financial difficulty and details of any forbearance)
  • Details of any second charge mortgage business
  • Full details of how employees or agents of your firm will be paid
  • Payments to lead generators or brokers

Complete the IT self-assessment questionnaire to discover if you need to fill in the IT controls form, detailed IT controls form (or neither form). Please Download

Please include in your business plan:

  • Procedures for mitigating the risk of fraud/crime (eg how you establish ownership of the pledged item)
  • How you ensure the accurate valuation of items
  • What happens if the customer wishes to redeem their item including details of how you calculate and communicate to the customer (before contract completion) interest and other charges

Please include in your business plan:

  • Number of agents who distribute your firm’s loans
  • Details of how agents are paid
  • The geographical spread of your firm’s activities
  • How you oversee agents, including training, monitoring, required documentation, payment, recruitment (including due diligence carried out on the agent), complaints handling and debt collection (including assessment of whether the customer is in financial distress and when to apply forbearance).

Please include in your business plan:

  • How your firm refinances its short term high cost credit agreements
  • How much income is expected from loans repaid and how much from fees/charges for late payment.
  • Estimated percentage of loans which will not be repaid on, or before, the original due date, as well as the reason for this.
  • Interest and charges applied to your high-cost short-term credit agreements, how these are communicated to the customer and how they comply with CONC 5A rules on the cost cap If you arrange high-cost short-term loans on an electronic system, please tell us how your firm makes sure it doesn’t impose or collect charges in excess of the cost cap – as explained in CONC 5A.3

Please include in your business plan:

  • When the asset is taken if there are arrears (and any forbearance considered)
  • Allowance for depreciation of the asset
  • How you carry out a credit worthiness assessment on a prospective borrower
  • How debts are collected including arrears handling

Please include in your business plan:

  • Plans to promote your debt management activities or other services (including any drafts you have)
  • Your debt counselling process and copies of the documents you provide to the customers

To become an authorised consumer credit firm, you have to show youmeet FCA minimum standards – known as FCA ‘threshold conditions’. you also have to comply with FCA principles, rules about systems and controls and Consumer Credit Sourcebook rules.

Please include in your business plan the number and geographical spread of your ARs, how they will be recruited and monitored in their work, who will monitor them and what fees will be paid.

Depending on the regulated financial activities your consumer credit firm carries out, you’ll have to apply to us for either limited or full permission. The minimum standards for limited permission and full permissions applications are different from each other.

  • Use our step-by-step tool to find out if you should apply for limited or full permissions.
  • Not-for-profit bodies have some different questions to consider about limited and full permission.
  • If you apply for the wrong permission, your application will be delayed.
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We’ll write to you confirming your ‘Part 4A permission’ authorisation. Your Scope of Permission notice will state which regulated activities you have permission to carry out, when your permission starts and which requirements or limitations you’ve requested.
Upon authorisation, our Financial Services Register will be updated automatically.

If we do not consider your application meets the standard for authorisation, we will recommend to a senior FCA committee that it is refused. If they agree, you will be sent a warning notice stating that the FCA is proposing to refuse to authorise you and explaining why. At this point, we’ll tell you how you can go on to make representations before the FCA makes its final decision.

You can withdraw your application at any time during the authorisation process. Common reasons for doing this include:

  • Not having all the information we require and so deciding to resubmit an application later
  • Unintentionally delaying responses to our questions with the result that we miss our legal deadlines
  • Understanding that authorisation is likely to be refused
Unfortunately, we cannot refund your application fee in any of these circumstances.

It’s possible to make a successful subsequent application after an application has been withdrawn.

Find out how much your authorisation fee is likely to be before you go ahead with your application.

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Here you can check whether you’re the type of firm that needs to be authorised by us and, if you are, what to do next.
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You should:

Send FCA your completed application form and appropriate fee. Offer your case officer more information, clarification and/or evidence, as requested. You may be required to meet your case officer.

FCA will:

Assess your application in line with our commitments to you, such as letting you know when a case officer has been assigned and keeping you up to date. Check your application against various databases and information held by other regulatory agencies in the UK or overseas. Assess your business, considering whether it meets the minimum ‘threshold conditions’ in FCA Handbook. Make a decision on your application.