The latest FCA update regarding APR in marketing is not a signal that APR is being removed from credit advertising, and it should not be read as a relaxation of standards for firms promoting finance. The FCA is asking a more practical question: does APR still help borrowers understand the real cost of credit, or does it need to be supported, changed or presented differently so customers can make better decisions?
For commercial finance brokers, lenders and introducers, the relevance goes beyond consumer loan advertising. Business finance advertising can still enter regulated credit territory where the borrower is a sole trader, a small partnership or an unincorporated body, especially where borrowing is below £25,000. The label “business finance” does not automatically take a promotion outside the consumer credit perimeter.
What the FCA APR Review 2026 is actually looking at
The FCA has published CP26/15 (click here to view), a consultation and discussion paper on consumer credit financial promotions. The consultation opened on 29 April 2026 and closes on 17 June 2026. The FCA says it is consulting on proposed changes to simplify its financial promotions rules in CONC 3, while also opening a discussion on how cost of credit information should be presented to consumers.
The key point is that the FCA is reviewing the role of APR in ‘APR credit advertising’, not announcing that APR is being abolished. The discussion covers whether the existing approach to APR disclosure still supports customer understanding, whether alternative or additional cost information might help, and whether the current rules around representative APR and representative examples remain the right framework.
This sits alongside a wider move to simplify parts of the consumer credit advertising rules where the FCA considers existing requirements may be outdated, duplicative or overly prescriptive. The FCA’s stated direction is to rely more on the FCA Consumer Duty where it already requires firms to communicate in a way that supports customer understanding.
That is not the same as lowering the standard. A more outcomes-focused regime can give firms more flexibility, but it also leaves less room for technical box-ticking that fails to explain the cost of borrowing clearly.
Why APR can help borrowers but still create confusion
APR is intended to provide a standardised annual measure of the cost of credit. It includes interest and certain fees and charges connected with borrowing, giving customers a benchmark to compare products. Under current CONC 3 rules, firms must disclose a representative APR where the promotion triggers the relevant requirements.
A representative APR is not simply a headline rate chosen for marketing. The FCA defines it as an APR at or below which the firm reasonably expects credit to be provided under at least 51% of agreements entered into as a result of the promotion.
That matters because rate-for-risk pricing is common. A borrower may see a representative APR, apply for finance, and then receive a different rate based on credit profile, term, product structure, affordability, security, trading history or underwriting outcome. In consumer credit, that can create disappointment or misunderstanding. In commercial finance, the same commercial issue appears in a different form when borrowers see a headline “from” rate and assume it reflects the cost they are likely to receive.
APR is useful when products are simple and directly comparable. It becomes less reliable when the structure changes. A lower APR over a longer term can produce a higher total repayment than a higher APR over a shorter term. Fees, drawdown behaviour, repayment profile, compounding, security and early repayment assumptions can all affect the pounds-and-pence cost.
What the FCA’s research says about APR credit advertising
The FCA’s research shows why this is not a theoretical concern. In its behavioural work, APR and term alone helped over 80% of participants correctly identify the lower total cost product when the lower-APR product also had the lower total cost. When the higher-APR product actually had a lower total cost because it had a shorter repayment term, only 17% correctly identified the lower total cost product.
That finding is commercially important. Borrowers often treat “lower APR” as shorthand for “cheaper borrowing”. That assumption can be right in simple comparisons, but it can fail where term, repayment profile or fees change the total amount paid.
The FCA’s research also found that participants shown only APR often relied on a “low APR equals low total cost” shortcut. Adding the total amount repayable, and in some cases monthly repayment information, helped counteract that assumption where it did not hold true.
For brokers, this goes directly to how finance products are promoted. A headline APR may satisfy part of the advertising framework, but it may still fail commercially if the customer walks away with the wrong impression of cost, repayments or total obligation.
Why total amount repayable may become more important
The appeal of pounds-and-pence disclosure is obvious. A borrower may struggle to interpret an annualised percentage, but they can usually understand “you borrow £20,000 and repay £38,400 over 36 months”, subject to the assumptions being clear.
The FCA’s research supports that direction cautiously. Across all tested product pairs, around 70% to 90% of participants shown total repayment alongside APR correctly identified the lower cost product, an improvement against presenting APR alone.
That does not mean every advert should replace APR with a bespoke cost figure. The FCA is also alert to the risk that too much flexibility could reduce comparability. Non-standard cost information led to worse outcomes on average than displaying APR alone, especially where one product showed APR and another showed total or monthly repayment figures. The research also found that only 44% of participants found it easy to compare products when different information was shown for different products.
The likely direction is not “APR versus total repayable”. The more realistic direction is a better balance between standardised comparability and clear cost explanation. APR remains useful because it creates a common benchmark, but the FCA is questioning whether it is enough on its own.
How this connects to Consumer Duty and credit advertising rules
The FCA’s proposed simplification of CONC 3 is part of the broader shift created by the Consumer Duty. The FCA has said it proposes to remove provisions in CONC 3 that may be overly prescriptive or outdated and instead rely on the Duty’s consumer understanding outcome to ensure communications meet customers’ information needs and are likely to be understood.
For firms, this changes the practical test. A promotion should not be reviewed only by asking whether the required words appear somewhere on the page. The better question is whether the customer reading the advert is likely to understand the product, the cost, the repayment obligation and the circumstances in which the advertised pricing may not apply.
That applies to FCA financial promotions across websites, email campaigns, comparison pages, landing pages, social media, affiliate material and introducer-facing content. If a promotion is technically accurate but creates a misleading cost impression, the risk has not disappeared.
Simpler rules can still produce higher expectations in practice. The Consumer Duty moves the focus from disclosure as a formality to disclosure as a tool for customer understanding.
Why business finance advertising can still fall within consumer credit rules
If you’re part of a commercial finance firm, then you should pay close attention to this section. While not all business finance advertising is regulated consumer credit advertising, and lending to limited companies, LLPs and larger partnerships will generally sit outside this specific consumer credit scope, the mistake is assuming that all B2B finance promotions are outside the rules set out by the FCA.
The FCA’s perimeter report states that its regulatory perimeter extends to business lending where the borrowing is under £25,000 and the business is a sole trader, a small partnership of two or three partners, or an unincorporated body of persons. It also states that lending to limited companies, LLPs and partnerships with more than three partners sits outside the scope of regulation in this area.
That means the practical test is not simply whether the advert uses business language. The relevant questions are borrower type, legal structure, borrowing amount, purpose, agreement type and whether the arrangement falls within the consumer credit perimeter.
This is where business lending regulation can become awkward for brokers. A website page promoting “business loans” may be aimed mainly at limited companies, but it can still be visible to sole traders. A LinkedIn post may be written for trading businesses generally, but it can still generate enquiries from partnerships of two or three people. An introducer email may describe a commercial product, but the actual borrower may be an individual trading as a business. The regulatory analysis follows the customer and the agreement, not the marketing label.
Where commercial finance brokers can face advertising risk
Advertising risk is most acute where brokers use pricing as a competitive lever without giving borrowers a fair basis for comparison. A broker may be able to quote a lender’s representative APR or headline pricing where that information comes from the lender and is passed on accurately. The issue arises when the broker removes the context, compares a best-case “from” rate against another firm’s actual offer, ignores arrangement fees or repayment structure, or suggests that it has access to materially better terms without evidence.
This matters in commercial finance because borrowers often speak to more than one broker. A borrower may be told that an existing offer is poor, that a better rate is available elsewhere, or that another broker has access to cheaper funding. If those claims are used to pull the customer away from a live offer but the case then goes back to the same lenders, or to a more expensive lender, the customer has not been helped to understand the cost of credit. They may simply have been diverted by an unsupported pricing claim.
A practical example of where the risk can arise
A lender may advertise a business finance product with pricing “from 9.9% APR”, and a broker may reasonably refer to that lender-provided information where it is presented faithfully, with the relevant assumptions, eligibility points and cost context preserved. The issue becomes more serious where a broker takes that type of headline rate and turns it into a broader competitive claim, suggesting it can obtain materially better finance terms than another broker, lender or existing offer without having a genuine basis for that comparison.
In practice, this can happen where a broker tells a borrower that another offer is too expensive, claims access to better APRs or cheaper lenders, and then submits the same case to the same funding market or ultimately places the customer with a higher-cost facility. The concern is not that the broker has repeated lender marketing information; it is that the broker has used selective or exaggerated pricing claims to win borrower preference, delay the customer’s decision, or create the impression of exclusive access to better credit terms.
A headline APR, “from” rate or comparison claim should not be used as a sales weapon unless the broker can substantiate the basis of the comparison, explain the assumptions behind the pricing, disclose relevant fees and make clear that the final cost will depend on lender underwriting, borrower status, loan structure and agreement type. Where the customer is a sole trader, small partnership or unincorporated business seeking borrowing that may fall within the regulated credit perimeter, the same behaviour can also create a regulated financial promotion issue rather than merely a poor commercial practice.
The market is calling for clearer cost disclosure, not lighter standards
The FCA APR review 2026 should be read as part of a wider move toward clearer borrower understanding. The FCA is not saying APR has no value. Its own research shows APR can help in simple comparisons, but it can also fail where the lower APR does not produce the lowest total cost.
For commercial finance brokers, the regulatory lesson is direct. Business finance advertising should be assessed by borrower status and agreement type, not merely by whether the product is described as commercial or B2B. Limited company lending will often sit outside this specific consumer credit scope, but sole traders, small partnerships and unincorporated bodies can bring a promotion back into regulated territory where the agreement falls within the perimeter.
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