Most UK funding consultants are not regulated by the Financial Conduct Authority, and for the businesses they typically serve, they do not need to be. Lending to limited companies sits outside the FCA’s remit entirely, so a consultant who helps a company raise debt or equity is generally not carrying out a regulated activity. Understanding where the regulatory line actually falls tells you what to check instead.
Here is the uncomfortable truth that the scepticism around this question deserves a straight answer to. Founders often assume that if a funding consultant is not FCA-regulated, something is wrong. The assumption is understandable and, for business funding, mostly mistaken. The UK has deliberately placed the great majority of business lending outside FCA regulation, which means the absence of authorisation is usually a market feature, not a warning sign. The real warning signs lie elsewhere, and conflating the two leaves founders checking the wrong thing.
This article explains the FCA position plainly: what the FCA does and does not regulate in business funding, why most funding consultants sit outside that remit, how the regulated parts get handled when they arise, and what you should actually check before you trust a consultant with your raise. It is general information rather than legal or regulatory advice, but it will help you ask the right questions rather than the reassuring ones.
What does the FCA actually regulate in business funding?
The FCA regulates consumer credit, not most business credit. It took over responsibility for consumer credit regulation on 1 April 2014, and the boundary it works within is narrower than most founders expect. Lending to limited companies and other corporate entities is outside the FCA’s remit altogether. So is lending to limited liability partnerships and partnerships of more than three people, and so is business lending above £25,000 where it is wholly or predominantly for business purposes [1].
The practical effect is that the bulk of business funding is unregulated by design. A limited company raising a commercial loan, an asset finance facility, or invoice finance is operating in a market that Parliament chose to leave outside consumer credit protections, on the basis that companies are commercial parties rather than consumers. This is not a gap or an oversight. It is the settled structure of UK financial regulation, repeatedly confirmed by the FCA itself, which has noted that most SME lending falls outside the remit it has been given by the government [1].
The narrow exception is worth knowing. Lending to a sole trader or a small partnership is regulated, but only up to £25,000, because at that scale the borrower is treated more like a consumer than a corporate. Above that threshold, or for any limited company, the activity falls outside FCA regulation. So whether your funding even touches the regulated perimeter depends on your legal structure and the size of the facility, and for most companies raising meaningful capital, it does not.
Why are most funding consultants not FCA-regulated?
It follows directly from the perimeter. A funding consultant who advises and facilitates raises for limited companies is not, in that activity, performing a regulated function, because the underlying lending is itself unregulated. Authorisation exists to govern regulated activities. Where the activity sits outside the perimeter, there is nothing for the consultant to be authorised for in the first place.
The misconception is that FCA authorisation is a general badge of legitimacy that every finance-adjacent business ought to hold. It is not. It is permission to carry out specific regulated activities, granted to firms that perform them. A business consultancy that helps companies prepare for and secure funding is doing strategic and advisory work, not lending, not arranging regulated consumer credit, and not dealing in regulated investments on a client’s behalf. Holding FCA authorisation would not be possible nor meaningful.
To be direct about my own firm’s position, because founders ask and deserve a clear answer: SGI Consultants is not FCA regulated. We are a business consultancy that provides funding facilitation, and the businesses we work with are companies raising capital outside the consumer credit perimeter. That is the same position as most genuine funding consultants in the UK, and it reflects the structure of the market rather than any shortfall in standards. The standards that matter here are about competence, alignment, and honesty, and none of those is conferred by an authorisation that the work does not require.
How are the regulated parts handled when they arise?
There are points where a raise can touch the regulated perimeter, and a serious consultant handles those properly rather than ignoring them. The clearest example is credit broking that relates to a regulated agreement, such as arranging finance for a sole trader within that £25,000 threshold. Activity of that kind requires an FCA-authorised firm, and it should never be done by an unauthorised one.
The standard, lawful way to manage this is to work with FCA-authorised partners for the regulated elements. At SGI, where a funding need involves regulated credit broking or a regulated product, we work with authorised partners, including Funding Options, a fully FCA-authorised credit broker, as well as specialist brokers who hold the relevant permissions. Funding Options operates as a regulated credit broker that introduces businesses to a panel of lenders, which is exactly the kind of authorised capability that should sit behind the regulated parts of a raise [4].
This partnership model is how the market is meant to work, and it is worth understanding because it inverts the founder’s instinct. The consultant provides strategic facilitation, which does not require authorisation, and, where it arises, the regulated activity is carried out by a firm that holds the required permissions. A consultant who claims to do everything in-house while being unauthorised, and who is arranging regulated credit, is the one to be wary of. A consultant who is candid about what they are not authorised to do, and who routes the regulated work to a partner that is, is behaving exactly as they should.
If consultants are unregulated, what protects me?
This is the fair question hiding inside the scepticism, and it deserves an honest answer rather than reassurance. Because most business lending is unregulated, it lacks the consumer protections that apply to regulated credit. Unregulated activities are generally not covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service, which means the safety nets you might assume exist often do not apply to a company’s commercial borrowing [5].
That sounds alarming until you see what it actually changes. It does not mean business funding is a lawless space. It means your protection comes from ordinary commercial and contract law, from your own due diligence, and from the standards of the people you choose to work with, rather than from a regulatory ombudsman. For a company raising capital, that is the normal footing on which commercial relationships operate. The shift is that the responsibility for vetting your adviser rests more firmly with you.
So the right response is not to demand FCA authorisation that the work does not require. It is to do the diligence that the market’s unregulated nature makes important. Check the consultant’s track record, understand their fee model, ask for references, and where any part of the work is regulated, confirm that an authorised firm is handling it. The protection in this market is largely earned through choosing well, which is why knowing what to check matters more than looking for a badge that often will not be there.
What should you check before trusting a funding consultant?
Because authorisation is usually the wrong test, here is the test that actually works. Run any prospective funding consultant through these checks, which are organised from the regulatory question outward.
- Establish whether your funding even touches the regulated perimeter. If you are a limited company raising above £25,000, it almost certainly does not, so FCA authorisation of the consultant is not the relevant question.
- If any regulated element is involved, such as credit broking for a sole trader within the threshold, confirm that an FCA-authorised firm is handling that part. You can check any firm’s authorisation on the FCA’s public register [3].
- Assess the fee model. A structure that aligns the consultant’s payment with your outcome, such as debt facilitation at zero cost to the business or success-linked equity facilitation, tells you more about their confidence than any badge.
- Ask for evidence of track record: businesses helped, funding secured, and references you can follow up.
- Ask what would make them decline your business. Willingness to say no is a stronger signal of integrity than authorisation a consultant does not need.
Work through that, and you are assessing the things that genuinely determine whether a consultant is trustworthy, rather than the one thing founders wrongly fixate on.
The principle to take away
Regulation is a tool aimed at a specific target, and in business funding, that target is mostly somewhere other than where founders point it. The FCA protects consumers and regulates consumer credit; it deliberately leaves the lending that companies actually use outside its remit. So the absence of authorisation in a funding consultant is usually the market working as designed, not a red flag, and treating it as the headline test distracts from the checks that matter.
Across more than 2,000 businesses advised and over £250M facilitated, the consultants worth trusting were never distinguished by a badge they did not need. They were distinguished by competence, by a fee model that put their interests on the line with the client’s outcome, and by the honesty to route regulated work to authorised partners and to decline business they could not serve. Check those. They are what protect you.
Want a straight answer on your own raise?
If you want clarity on how your funding would be structured and who handles each part, start with an honest assessment. Book a free 45-minute Funding Readiness Assessment, and we will explain the route, the fee model, and where any regulated element would sit. To judge any adviser fully, read our guide on choosing a UK funding consultant, and to understand the success-linked model, see how our no-win, no-fee funding facilitation works.
Frequently Asked Questions
Do funding consultants need to be FCA-regulated?
Generally, no, when they advise and facilitate raises for limited companies, because lending to companies sits outside the FCA’s remit. Authorisation is only required for regulated activities, such as credit broking related to regulated consumer credit. A consultant working with companies raising commercial funding is usually not performing a regulated function and so does not need authorisation.
Is it a red flag if my funding consultant is not FCA authorised?
Usually not, for business funding. The UK deliberately places most business lending outside FCA regulation, so the absence of authorisation typically reflects market structure rather than a problem. The genuine red flags are an unauthorised firm arranging regulated credit, an opaque fee model, or an unwillingness to provide references or to decline unsuitable business.
Is SGI Consultants FCA regulated?
No. SGI Consultants is a business consultancy that provides funding facilitation, working with companies raising capital outside the consumer credit perimeter, a service that does not require FCA authorisation. Where a funding need involves regulated credit broking or a regulated product, SGI works with FCA-authorised partners, including Funding Options and specialist brokers who hold the relevant permissions.
What business lending is regulated by the FCA?
The FCA regulates consumer credit, which includes lending to sole traders and small partnerships, but only up to £25,000. Lending above £25,000 wholly or predominantly for business purposes is unregulated, and all lending to limited companies, limited liability partnerships, and partnerships of more than three people is outside the FCA’s remit.
Do I get Financial Ombudsman protection on a business loan?
Often not, because most business lending is unregulated and unregulated activities are generally outside the scope of the Financial Ombudsman Service and the Financial Services Compensation Scheme. Your protections come mainly from commercial and contract law and from your own due diligence. This is why vetting your lender and adviser carefully matters in business funding.
How do I check if a finance firm is FCA authorised?
You can check any firm’s authorisation status on the FCA’s public register, available through the FCA website, by searching the firm’s name or reference number. This is the right step when a firm is carrying out a regulated activity, such as credit broking for regulated agreements, or claims to be authorised. For unregulated business facilitation, authorisation is not the relevant test.
References
- FCA, response to the FSB super-complaint on personal guarantees for business loans (confirming that lending to limited companies, LLPs, partnerships of more than three persons, and business lending over £25,000 is outside the FCA’s remit), 2024. https://www.fca.org.uk/publications/corporate-documents/follow-work-fsb-super-complaint-personal-guarantees-business-loans
- UK Parliament, written evidence on SME lending (FCA assumed responsibility for consumer credit on 1 April 2014; loans to limited companies remain unregulated). https://committees.parliament.uk/writtenevidence/51703/html/
- FCA, Financial Services Register (check a firm). https://www.fca.org.uk/
- Funding Options, regulatory status as an FCA-authorised credit broker. https://www.fundingoptions.com/
- FCA, Perimeter Report (unregulated activities are not usually covered by the FSCS or the Financial Ombudsman Service). https://www.fca.org.uk/publications/corporate-documents/fca-perimeter-report
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Kurt Graver is the founder and CEO of SGI Consultants, a business consultancy that has helped over 2,000 entrepreneurs establish successful startups using systematic business development methodologies. An accountant with an MBA and 25 years of commerce and consultancy experience, Kurt specialises in strategic planning, market analysis, and sustainable business growth