Is my business lender regulated? What the FCA action on six lenders means

On 23 October 2026 the Financial Conduct Authority said it had restricted six unregulated lenders after raising concerns about their anti-money laundering controls. All six are what the FCA calls Annex 1 firms, lenders that are registered with it only for money laundering supervision and are not authorised in the way a bank is. If your business has borrowed from a specialist lender, or is about to, here is what happened, how to check who you are dealing with, and what to do if your lender is affected. Smart Funding Solutions is a broker, not a lender. We compare whole of market options and arrange business finance from £10,000 to £20 million.

01What did the FCA do to the six lenders?

The FCA said it found concerns about the firms' anti-money laundering policies, controls and procedures while assessing their applications. Each firm agreed to voluntary restrictions, which limit its ability to take on new customers or do new business with existing ones, including extending existing credit. The firms named in the FCA's notes are these.

• Kingscrown Finance Ltd. Restrictions from 21 April 2026, extended on 25 September 2026, which require an orderly wind-down of its loan book.
• MOMSB Ltd and Momentus Capital Ltd. From 7 October 2026, no new customers or new lending arrangements, subject to limited exceptions, and an independent review of their controls.
• Grosvenor Funding Ltd and Grosvenor Funding (North West) Ltd. From 9 October 2026, no new customers or new lending arrangements, and an independent review.
• Abbital Ltd. From 15 October 2026, new customers, new lending and payments from existing customers allowed only in specified circumstances, and an independent review.

Steve Smart, the FCA's executive director for fighting financial crime, said "We have warned Annex 1 firms that they face increased scrutiny," and added "Where they cannot satisfy us, we will intervene." The restrictions are about controls, and the FCA has not said that any borrower did anything wrong.

02What is an Annex 1 lender?

Annex 1 firms are unregulated lenders, financial leasing companies, money brokers and safe custody providers. They must register with the FCA for anti-money laundering supervision under the Money Laundering Regulations, but they are not authorised by it, and the FCA's wider conduct rules do not apply to them.

That covers a large part of the business lending market. Most lending to limited companies sits outside FCA regulation, including many bridging loans, unsecured business loans and merchant cash advances. In March the FCA said around 1,200 Annex 1 firms were registered with it for money laundering purposes only, and in August it said it was applying increased scrutiny and had sent an information request to around 900 Annex 1 firms.

Unregulated does not mean unsafe. Many established specialist lenders are Annex 1 firms and lend responsibly. It does mean you have fewer protections if something goes wrong, so it pays to know which kind of lender you are dealing with.

03Is my business loan regulated by the FCA?

Usually not, if you borrowed through a limited company. Business loans to companies are generally unregulated whoever the lender is, even when the lender is a bank that is authorised for other products. Some lending to sole traders and small partnerships can be regulated, which is one of the differences explained in our guide to choosing between a sole trader and a limited company and on our sole trader loans page.

The difference matters most when things go wrong. The FCA has said that customers of Annex 1 firms cannot take a complaint to the Financial Ombudsman Service, even if they were told to set up a limited company to get the loan. Micro-enterprises and small businesses that meet the size limits can use the Financial Ombudsman Service for complaints about authorised firms, such as their bank.

Annex 1 firms are unregulated lenders, financial leasing companies, money brokers and safe custody providers.

04How do I check if a business lender is legitimate?

A few simple checks before you sign will tell you most of what you need to know.

• Ask the lender directly. Is it authorised by the FCA, or registered with it for money laundering supervision only? Ask for its firm reference number and check the answer yourself on the FCA's Financial Services Register.
• Check the company. Look the lender up at Companies House, and make sure the name on the offer letter matches the company you have been dealing with.
• Read the offer in full. Check the rate, arrangement and exit fees, any early repayment charge, and what security is being taken, such as a personal guarantee or a debenture.
• Be wary of pressure. Any request to pay a fee to a personal account, or to set up a new company just to borrow, is a reason to stop and ask questions.

Our lender directory explains what many well-known business lenders offer, and what a business loan really costs shows the fees to look for.

05What should I do if my lender has been restricted?

Keep to your agreement and do not stop paying. The restrictions limit new business and, for some firms, how they can accept payments from existing customers, but they do not cancel what you owe. Contact the lender in writing, ask how and where you should make repayments, and keep a record of every payment.

If the lender cannot extend or renew a facility you were relying on, plan the next step early, particularly with a bridging loan nearing its end date. Ask for a redemption statement so you know the exact amount to repay, then compare the options.

• Business loan refinance moves an existing loan to a new lender.
• Re-bridging loans replace a bridge that is due before your exit is ready.
• Commercial mortgages or commercial refinance can take out a bridge secured on property.
• Merchant cash advance refinance and debt consolidation loans can replace several short-term facilities with one.

The bridging loan calculator and business loan calculator help you compare the cost.

06Will this make it harder to get business finance?

Not for most businesses. The FCA has said Annex 1 applications will take longer and firms must show they can meet the money laundering rules, so some smaller specialist lenders may slow down or stop lending. Banks and established specialist lenders are still lending, and the Bank of England's latest credit conditions survey shows where appetite stands.

Expect more checks when you apply. Lenders will ask for identification for directors and shareholders, recent bank statements and, for larger loans, where the money is going and where any deposit came from. Having these ready speeds things up. If one lender says no, our guide to what to do after a decline sets out the next steps, and our post on loan stacking explains why taking several short-term loans at once can make things worse.

07What does this mean for your funding?

Know who you are borrowing from. Check whether your lender is authorised or registered with the FCA, read your agreement, and if your lender has been restricted, keep paying and plan a refinance in good time. For new borrowing, compare more than one lender, including Growth Guarantee Scheme loans, secured business loans, asset finance and invoice finance.

See how much your business could borrow, then get your Instant Quotes to see your lender matches instantly, with no credit check. A broker then searches the wider market and explains who each lender is. Read how Instant Quotes work or learn more about us. Lenders make every decision, and all finance is subject to status.