Why can't Ask Sterling help sole traders or partnerships?

Ask Sterling only works with UK limited companies because introducing a sole trader or a small partnership to finance is regulated credit broking, and Ask Sterling does not hold FCA permission to do that. Business finance for limited companies is not regulated by the Financial Conduct Authority, so introducing a limited company is not credit broking. This is Ask Sterling's understanding of the rules, not legal advice.

How the rules draw the line

The FCA's credit rules hang off the Regulated Activities Order 2001 (the RAO). A "credit agreement" is defined in article 60B as an agreement between "an individual or relevant recipient of credit" and another person who provides credit.

A "relevant recipient of credit" is "a partnership consisting of two or three persons not all of whom are bodies corporate", or an unincorporated body that is not made up entirely of bodies corporate.

So a sole trader (an individual) and a two- or three-person partnership are inside the definition. A limited company is not.

The £25,000 point that catches people out

Article 60C exempts a credit agreement where the lender provides "credit exceeding £25,000" and it is entered into "wholly or predominantly for the purposes of a business". Many sole traders assume that means a large business loan is outside the rules entirely.

The loan may be. The introduction is not. Credit broking under article 36A covers introducing an individual or relevant recipient of credit to a lender "with a view to P entering into by way of business as lender a regulated credit agreement (or an agreement which would be a regulated credit agreement but for any of the relevant provisions)", and article 60C is one of those relevant provisions.

In plain English, as we read it: introducing a sole trader to a £60,000 business loan is still regulated credit broking, even though the loan itself is exempt.

Sterling's take: it would be easy to take every enquiry and sort it out later. That is how people get hurt, so we draw the line at the front door.

What this means for you

If you are a sole trader, check any broker's permissions on the FCA Register before you share details. A broker who should be authorised and is not is a red flag. See funding scams.

Who we do work with

Limited companies, trading 12+ months, turning over about £60k+ a month, with no CCJs or defaults in the last 12 months, two or fewer loans or advances running, an applicant owning 51%+, and looking for £50k+. Smaller limited companies (£12k+ a month, 4+ months trading) can still ask. Enquiries go to one funding partner only, with your consent. Read about Ask Sterling and how we get paid for the rest.

What to do next

If you are a limited company, read is business finance regulated by the FCA so you know what protections you do and do not have. If you are a sole trader, take the same questions to an FCA-authorised firm.