B2B Loan - Non interest bearing - Do I need FCA approval?

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Hubert B

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Nov 25, 2017
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  • #1
    A supplier is struggling for operating capital. If I loan money from my company to my supplier will I trigger a requirement for FCA approval? Would be willing to make the loan at 0% interest since it facilitates servicing of profitable contracts by my company. Does it make any difference if the supplier is overseas? Does it make any difference if I use shareholder funds to make the loan?
     
    Paul Kelly ICHYB

    Paul Kelly ICHYB

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    • Jan 21, 2008
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  • #2
    I am pretty sure that you can loan the money as it is not an ongoing commercial operation - one of the accounting/other bods will confirm that.

    What I would be worried about is you getting the money back or more supplies.

    What do you mean by shareholder funds?
     
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    tony84

    tony84

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    Apr 14, 2008
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  • #3
    I think (could be wrong) you only need FCA approval is loans is a core part of your business.
    If you only intend on making one loan and with no profit, i dont see that being a core part of your business.

    I dont know what the definition of core is, but I imagine it is more than 1 loan.
     
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    H

    Hubert B

    Free Member
    Nov 25, 2017
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  • #5
    Paul Kelly ICHYB said:
    I am pretty sure that you can loan the money as it is not an ongoing commercial operation - one of the accounting/other bods will confirm that.

    What I would be worried about is you getting the money back or more supplies.

    What do you mean by shareholder funds?
    Click to expand...
    Thanks for your reply. To keep the thread on topic lets assume I can manage the risk of non repayment. I'm focused initially on legality/ regulation.

    As regards the reference to shareholder funds: If I issue new shares to fund the loan does that trigger FCA interest? Would be existing sophisticated investors in my network.
     
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    Mark T Jones

    Mark T Jones

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    Nov 4, 2015
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  • #6
    Hubert B said:
    Thanks for your reply. To keep the thread on topic lets assume I can manage the risk of non repayment. I'm focused initially on legality/ regulation.

    As regards the reference to shareholder funds: If I issue new shares to fund the loan does that trigger FCA interest? Would be existing sophisticated investors in my network.
    Click to expand...

    Why would you need to issue shares to fund a loan?
    .in any case, FCA isnt relevant here
     
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    JEREMY HAWKE

    JEREMY HAWKE

    Business Member
    • Business Listing
    Mar 4, 2008
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    www.jeremyhawkecourier.co.uk
  • #7
    Mark T Jones said:
    Why would you need to issue shares to fund a loan?
    .in any case, FCA isnt relevant here
    Click to expand...
    I think he means issuing shares to raise funds should the loan default and the funds are not forthcoming
     
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