Do you need FCA authorisation for 0% finance or BNPL?

Offering 0% finance or buy now, pay later can amount to regulated activity, even where your business never handles the money and never lends it. If you promote finance, refer customers to a lender, or help them apply, you may be credit broking - and credit broking requires FCA authorisation or Appointed Representative status.

Offering 0% finance or buy now, pay later has become a standard part of modern marketing across a wide range of industries. Consumers expect to see it, and many businesses treat it as a simple, low-risk way to increase sales. That assumption is where the problem starts: many businesses believe the finance provider takes full responsibility.

These rules are not limited to one sector. They apply to any business offering finance to customers, and getting it wrong can lead to fines, enforcement action and reputational damage.

What counts as offering finance

When your business moves from selling a product or service into being involved in the customer’s access to finance, you may have crossed into credit broking. It does not just mean lending money yourself. It can include promoting finance options, referring customers to a lender, or helping customers complete applications. Even an informal conversation can count if you are influencing the customer’s decision.

What is credit broking?

Credit broking occurs when you introduce a customer to a lender. You do not need to handle money yourself to be regulated. Your business is credit broking if it recommends a finance option or passes customer details to a lender. Displaying finance as a payment option can also count, depending on how it is presented and whether you are influencing the decision.

In practice that could be a car dealership offering finance packages, a dental clinic offering payment plans, or a retail store offering pay monthly options. The relevant definitions sit in the FCA’s Perimeter Guidance (opens handbook.fca.org.uk in a new tab), and the conduct rules for credit brokers in CONC (opens handbook.fca.org.uk in a new tab).

Do you always need FCA authorisation?

In many cases you will need to be authorised or regulated in some way, and there are two main routes: direct FCA authorisation, or becoming an Appointed Representative.

Some businesses consider becoming an Introducer Appointed Representative, often seen as a quicker and simpler way to start offering finance. This model is frequently misunderstood and sometimes overused. It can be appropriate in the right circumstances, but it still involves regulatory responsibility and ongoing oversight from the Principal firm. Businesses operating as an IAR work within defined boundaries and cannot assume the model removes their compliance obligations.

Some businesses may qualify for limited permission, and specific exemptions can apply. These are narrow and often misunderstood, which is where many businesses get it wrong.

The exemption, and why it is narrower than it looks

There are limited circumstances where a business can offer finance without FCA authorisation. One of the most common exemptions applies where the arrangement meets all of the following:

• The agreement lasts no more than 12 months
• The total is repaid in no more than 12 equal instalments
• No interest or additional fees are charged

This can either be self-funded by the business or introduced through a third-party lender or broker, and it can include certain buy now, pay later models where the same criteria are met.

In practice the window is very narrow. The limits on repayment terms and the requirement for equal instalments restrict affordability, which limits the value of the product or service that can realistically be offered. The route may be technically available without being commercially viable for higher-value transactions.

0% finance is still regulated

Almost any high-ticket purchase carries a 0% finance label, which makes it easy to assume anyone can offer one. Interest-free does not mean outside FCA rules.

Businesses also cannot avoid regulation by using a third-party lender. Promoting 0% finance will usually be a financial promotion, which is regulated in its own right. Not applying interest does not take the promotion outside the rules.

Buy now, pay later

Buy now, pay later has historically been treated differently from other forms of credit, although regulation in this area is tightening. Even where the lender carries regulatory responsibility, the business promoting it has obligations of its own. FCA scrutiny here is increasing, driven by the risk of misleading promotions and the importance of clear, fair messaging.

Where businesses get this wrong

“We only point customers towards a finance provider.” That is an introduction, which is credit broking. It does not matter whether money is handled - connecting the customer to finance is the trigger.

“Our lender told us not to worry.” The lender is responsible for its own activity, not yours. Your promotion and introduction are assessed separately, so you may still need authorisation or AR status. Being linked to an authorised lender does not make you compliant.

“We only offer finance occasionally.” The FCA views this by activity, not frequency. A single introduction can fall within credit broking. There is no minimum threshold.

“The process is digital, so we’re not really involved.” Directing customers to an online application or embedding finance links on your website still puts you in the finance journey.

“We advertise 0% finance but don’t arrange it.” Advertising finance is a financial promotion. It must be clear, fair and not misleading, with representative APR examples where required.

“The finance company gave us the wording.” You remain responsible for how that wording is used. Placement, context and emphasis all matter, and copy can become misleading through layout or omission.

“We don’t receive commission.” Payment is not the trigger. The activity is. Unpaid introductions can still fall within credit broking.

The risks of getting it wrong

Problems with financial promotions can lead to FCA enforcement action, fines and penalties. You may be required to stop offering finance immediately, with the reputational consequences and loss of customer trust that follow.

What to do next

If you already issue or communicate financial promotions, or plan to introduce them, review how finance is offered. Establish whether your activities fall under credit broking and whether authorisation or AR status is required. Review your financial promotions across your website, advertising and social media.

Offering finance is a powerful tool for growth, and it brings regulatory responsibility that cannot be delegated to the lender. Most businesses that get this wrong do so by assumption rather than intent.