How to check a business loan broker is legitimate

Answer in brief

Look the broker up on Companies House to confirm it's a real, active company. If your loan would be regulated (usually £25,000 or less to a sole trader or small partnership), check the FCA register too. NACFB membership, clear fees and recent reviews are good signs. An upfront fee before any offer is not.

1. Companies House

Search the company name on Companies House. Check it's active, see how long it has existed, and look at who the directors are. The company number should match the one on the broker's website.

2. The FCA register

Lending to limited companies, and most larger loans to businesses, isn't regulated by the FCA, so a broker that only arranges those deals may not need FCA authorisation. Loans of £25,000 or less to sole traders, partnerships of two or three partners and some other unincorporated businesses are usually regulated. For those, the broker must be authorised. Check the FCA register and the firm reference number (FRN) on its site.

3. Trade body membership

Many commercial finance brokers belong to the NACFB, the National Association of Commercial Finance Brokers, which has a code of conduct for members. Membership isn't required, but it's a useful sign.

4. Reviews and behaviour

Read recent reviews from businesses similar to yours. Notice how the broker behaves too: a good one asks sensible questions, explains the options and doesn't pressure you.

Questions and answers

Do all business loan brokers need to be FCA authorised?

No. Brokers that only arrange unregulated business lending, such as loans to limited companies, don't need FCA authorisation for that activity. Brokers arranging regulated credit do.

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