Consumer lending license
Authorizes a company to make loans to individuals for personal, family, or household purposes.
Commercial lending license
Authorizes a company to extend credit to businesses for commercial or business purposes, where one is required.
| Feature | Consumer lending license | Commercial lending license |
|---|---|---|
| Who the borrower is | An individual borrowing for personal use | A business borrowing for commercial use |
| How heavily regulated | Heavily regulated, most states license it | Less uniformly regulated, but a growing number of states require licensing |
| Rate and fee rules | State consumer-credit limits commonly apply | Fewer rate caps, though disclosure rules are expanding |
| Federal overlay | TILA, ECOA, and CFPB authority apply | Lighter federal consumer overlay, varies by product |
| Typical license names | Consumer finance, small loan, supervised lender | Commercial finance, lender, or sales finance, where required |
Best for
Pick Consumer lending license
Choose the consumer lending license if you make loans to individuals for personal, family, or household purposes.
Best for
Pick Commercial lending license
Choose the commercial lending license if you extend credit to businesses for commercial purposes in states that require it.
The borrower sets the rules
The single biggest factor in lending licensing is who borrows the money. Lending to individuals for personal, family, or household purposes is consumer lending, which is heavily regulated. Most states require a license, often with rate and fee limits, mandatory disclosures, and a federal overlay that includes the Truth in Lending Act, the Equal Credit Opportunity Act, and Consumer Financial Protection Bureau oversight.
Lending to businesses for commercial purposes has historically been lighter touch, but that is changing. A growing number of states now require commercial lenders, and some merchant cash advance providers, to be licensed or to make specific disclosures. The license names vary: commercial finance, lender, or sales finance depending on the structure. Because the same dollars can be a consumer loan in one structure and a commercial loan in another, the classification of each product drives the license you need.
Getting the classification right
Many lenders offer both consumer and commercial products and end up holding different licenses for each, sometimes in the same state. Confirm how each product is classified in every state where you lend before you file. See our lending licensing overview or talk with our team about your product mix.
Frequently asked
- Is commercial lending always unlicensed?
- No. Commercial lending was historically lighter touch, but several states now license commercial lenders or require disclosures, especially for small-business financing and merchant cash advances. Confirm each state.
- Can one license cover both consumer and commercial loans?
- Rarely. The two are usually licensed under different categories. Lenders offering both products often hold more than one license per state.