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Loan Referral Agreement Template for England and Wales

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Key Requirements PROMPT example:

Loan Referral Agreement

"I need a Loan Referral Agreement for my fintech company to refer potential SME borrowers to a major UK bank, with a commission structure of 1% for successful referrals and specific provisions for data protection compliance, starting from March 2025."

Document background
A Loan Referral Agreement is essential when establishing formal referral arrangements in the UK lending market. This document, governed by English and Welsh law, sets out the framework for compliant referral activities, including FCA requirements, commission structures, and operational procedures. It's particularly crucial for maintaining regulatory compliance while managing commercial relationships between lenders and their referral partners. The agreement typically includes detailed provisions for data protection, anti-money laundering compliance, and treating customers fairly principles.
Suggested Sections

1. Parties: Identification of the referrer and the lender

2. Background: Context of the agreement and brief description of the parties' businesses

3. Definitions: Key terms used throughout the agreement including regulated terms under FSMA and Consumer Credit Act

4. Scope of Services: Details of referral services to be provided and regulatory permissions required

5. Referral Process: Step-by-step process for making referrals including compliance requirements

6. Compensation: Fee structure, payment terms and commission disclosure requirements

7. Regulatory Compliance: Obligations regarding FCA requirements, AML, data protection and other regulatory matters

8. Term and Termination: Duration of agreement and circumstances for termination

Optional Sections

1. White Labelling: Terms for use of branding and marketing materials, including financial promotion requirements

2. Training: Requirements for staff training on regulatory compliance and referral procedures

3. Service Levels: Performance metrics, standards and reporting requirements

Suggested Schedules

1. Referral Fee Schedule: Detailed breakdown of fee structure and commission rates

2. Referral Process Flow: Detailed workflow diagram of the referral process including compliance checkpoints

3. Compliance Requirements: Detailed regulatory requirements, procedures and relevant legislation

4. Required Documentation: List of documents needed for referrals including KYC and AML requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions


































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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Financial Services and Markets Act 2000 (FSMA): Primary legislation regulating financial services activities in the UK, including authorization requirements, permissions, and financial promotion rules

FSMA (Regulated Activities) Order 2001: Defines regulated activities including credit broking and specifies exemptions and permissions required for financial services operations

Consumer Credit Act 1974: Governs consumer credit activities including credit broking, with provisions for consumer protection and disclosure requirements

FCA Handbook: Regulatory guidance including CONC (Consumer Credit sourcebook), SYSC (Systems and Controls), and PRIN (Principles for Businesses)

Data Protection Act 2018 and UK GDPR: Legislation governing the handling of personal data, including privacy notices, consent requirements, and data sharing provisions

Money Laundering Regulations 2017: Regulations specifying customer due diligence requirements and record keeping obligations for financial services

Financial Services (Distance Marketing) Regulations 2004: Specific requirements for financial services that are marketed at a distance to consumers

Consumer Rights Act 2015: Legislation ensuring fairness of contract terms and transparency requirements in consumer contracts

Electronic Commerce (EC Directive) Regulations 2002: Regulations governing the provision of online services and electronic commerce

Bribery Act 2010: Anti-bribery legislation including provisions for commission disclosure and prevention of corrupt practices

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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