£7.5bn car finance scandal: small businesses left to pick up the bill

This may be dressed up as a consumer win, but small businesses are about to feel the squeeze. 

The FCA’s £7.5bn motor finance redress scheme is not designed for them – yet small businesses are already warning of the fallout: tighter lending, higher costs, and another quiet hit to firms that rely on finance just to keep moving.

At first glance, the FCA’s intervention looks straightforward. Consumers who were overcharged through hidden or unfair commission on car finance agreements will be compensated. Around 12.1 million agreements are in scope, with billions set aside for redress.

But small businesses – despite often using the same lenders, the same finance products, and facing the same commission structures – are largely excluded.

Most will not be able to claim a penny.

The scheme is explicitly framed around consumers. That means individuals acting outside business purposes. If a van, car, or fleet vehicle was financed through a business – even a microbusiness – it is unlikely to qualify.

• Should it be extended to small businesses too?
• Why is it just consumers who benefit?
• How are small businesses struggling with this?

Responses asap.