Lending via a limited company

Steve, If you are lending on ThinCats there is a thread on the old Forum, "Using companies on ThinCats", which you should read. On the specific question of a licence, one of the posts there states:

"a company might potentially need a Consumer Credit Act licence if it were participating in loans to consumers, sole traders or partnerships with fewer than four partners (see www.oft.gov.uk/OFTwork/credit-licensing/do-you-need/who-needs ), but this should not, I think, be issue on ThinCats."

I think you'd need to be more careful on Assetz or FC, because some of their loans may be to these categories. Avoid those loans and you should be OK.

Guidance from the OFT (www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft140a.pdf) on the Consumer Credit Act 1974 says:

'3.21 The Act does not regulate:
• a consumer credit agreement by which the creditor provides credit exceeding £25,000, or

• a consumer hire agreement requiring the hirer to make payments exceeding £25,000
provided in each case that the agreement is entered into by the debtor or hirer wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by him.

3.22 An agreement is presumed to be wholly or predominantly for business purposes if it includes a declaration to that effect by the debtor or hirer, in a prescribed form, unless the creditor or owner knows or has reasonable cause to suspect that this is not the case. 'Business' is defined in section 189 of the Act, but a person is not to be treated as carrying on a particular type of business merely because occasionally he enters into relevant transactions.'

I wonder if this means that a company can lend to individuals so long as the total original loan amount is over £25,000? (And assuming that the platform has taken a declaration from the borrower that the loan is wholly or predominantly for business purposes)