During your application you are asked to make a short Business Purpose Declaration. It is brief, but it is important, so it is worth understanding exactly what you are confirming and why we ask. In plain terms, you are stating that the loan is for your company’s business, not for personal spending. That single fact sits at the heart of how this product works and how it is regulated.
What the declaration says
The Business Purpose Declaration is your confirmation that the borrowing will be used wholly or predominantly for the purposes of the company’s business. It is made by you on behalf of the company, as a director or otherwise authorised person. It is not a long form; it is a clear statement of fact about how the money will be used.
Why we need it
We lend to UK limited companies and LLPs, which the law treats as bodies corporate. Lending to a body corporate for business purposes sits outside FCA consumer-credit regulation, because a company is not an individual or relevant recipient of credit under Article 60B FSMA RAO 2001. That position depends on the borrowing genuinely being for the company’s business. The declaration is how we record that the loan meets this condition. To understand the legal status of the borrower, see what is a body corporate, and for the test itself, see wholly or predominantly business purpose.
Why honesty matters
The declaration is not a formality to click past. It reflects the real basis on which we lend, and the protections and obligations that flow from it differ from consumer borrowing. If a loan were really for personal use dressed up as business borrowing, the declaration would be untrue, and that misrepresentation could affect the agreement and your position. Being straight with us protects both sides. If you are genuinely unsure whether your intended use counts as predominantly business, ask us before you sign rather than guessing.
What “wholly or predominantly business” means in practice
“Wholly” business is straightforward: every pound goes to the company’s trading needs, such as stock, equipment, payroll, supplier payments or bridging a timing gap in cash flow. “Predominantly” business covers the realistic situation where use is mostly, but not entirely, for the business. The point is that the main purpose must be the company’s business. A loan taken out to fund a personal purchase would not qualify, even if it passed through a company account.
How it fits the rest of your agreement
The Business Purpose Declaration sits alongside the other documents you receive. Your Key Information Sheet (KIS) sets out the amount, term, total cost of credit and the full repayment schedule, and the Business Loan Agreement is the binding contract you sign. The declaration underpins all of it by confirming the loan is the kind of business borrowing this product is for. None of these documents asks for a personal guarantee, because the debt is the company’s.
A note on what this status means for you
Because the borrowing is to a company for business purposes, it is not covered by the Financial Ombudsman Service, the FSCS or the BBRS. If you ever needed to escalate beyond our internal complaints process, the route is the courts rather than the ombudsman. That is a direct consequence of the same Article 60B position the declaration helps establish, so it is fair that you see it clearly up front.
If you want to confirm Credicorp itself before signing anything, you can check our entry on the Companies House register at company number 16093826. And if you are weighing whether short-term business borrowing is right at all, free independent guidance for your business is available from Business Debtline (businessdebtline.org, 0800 197 6026). Read the declaration, make sure it is true for your company, and only then sign.
Still need help with this?
If this article has not answered your question, you can send us a request using one of our online forms, visit the Support page, or email us at support@credicorp.co.uk.