Helping PSPs offer business lending
Many payment firms, platforms and fintechs are exploring ways to support their business customers and merchants with access to working capital — whether through business loans, revolving lines of credit, or invoice finance / factoring arrangements.
Where lending is provided to UK-registered businesses for commercial purposes, these products do not fall within the Consumer Credit Act. However, firms can still create regulatory and conduct risk through the way products are structured, documented, marketed and governed.
Payment Practice supports firms in designing and operating clear, well-evidenced compliance frameworks for business lending and merchant finance — without drifting into consumer credit or unintended regulatory exposure.
What we mean by “business lending”
We support firms offering finance to:
- UK-registered limited companies
- business clients and merchants
- commercial borrowers only
This includes:
- term loans for business purposes
- revolving or on-demand lines of credit
- invoice finance and invoice discounting
- factoring arrangements
- embedded or platform-based merchant finance
These products are outside the Consumer Credit Act where they are genuinely business-only — but that does not remove the need for proportionate governance, clear customer communications and effective controls.
Who we typically work with
We regularly support:
- Payment service providers and merchant acquirers lending to their merchants
- E-money firms offering business accounts alongside lending products
- Platforms and marketplaces offering finance to sellers or suppliers
Where firms commonly run into trouble
Even where products are unregulated, issues often arise in the following areas:
1) Regulatory perimeter clarity
- Clear confirmation that lending is business-only
- Avoiding sole trader or personal borrowing features
- Ensuring invoice finance / factoring structures are properly documented
2) Financial promotions and communications
- Website copy and landing pages
- Merchant portal messaging and emails
- “Fast funding”, “pre-approved”, or headline pricing claims
- Ensuring communications are accurate, balanced and not misleading — even outside the consumer regime
3) Terms, agreements and disclosures
- Loan agreements and facility letters
- Invoice finance / factoring documentation
- Fees, charges, default and termination wording
- Clear explanation of how facilities operate in practice
4) Governance, oversight and monitoring
- Product-level risk assessments
- Financial crime and fraud considerations (particularly invoice-based lending)
- Ongoing monitoring of lending activity, complaints and arrears
- Management information and escalation processes
These are often the first areas reviewed by banks, partners or regulators when firms are asked to evidence their control framework.
How Payment Practice helps
Our support is compliance-led, practical and proportionate.
Business lending perimeter support
- Clear articulation of why the product sits outside the Consumer Credit Ac
- Mapping customer journeys and roles (lender / introducer / partner)
- Identifying and documenting regulatory edge cases
Financial promotions & website review
- Compliance review of business-lending webpages, FAQs and merchant communications
- Recommendations to improve clarity and reduce conduct risk
- Ensuring messaging reflects the firm’s actual role and product structure
Documentation & control framework
- Review of loan agreements, credit terms and invoice finance documentation (from a compliance perspective)
- Design of proportionate policies, procedures and governance
- Practical monitoring plans and MI suitable for business-only lending models
Partner and third-party readiness
- Support with due diligence required by:
- banks
- funders
- card schemes
- enterprise partners
- Clear accountability and oversight models for introducer or partner arrangements
What we don’t do
We do not provide marketing or commercial optimisation.
Our focus is on compliance, regulatory risk, governance and defensibility.
Where legal advice is required, we are happy to work alongside your legal advisers to ensure the compliance framework aligns with the agreed legal position.