MEMA Guides / FCA authorisation
Writing an FCA business plan that passes
What the FCA expects, the 13 areas to cover, projections that reconcile, and the mistakes that slow applications down.
- 13areas in the FCA sample business planSource
- 6 monthsstatutory period for a complete FSMA applicationSource
- 3 yearsof forecasts is FCA best practiceSource
- Nonepage or word limit set by the FCASource
The guide in 30 seconds
Practical guidance- 01Start with your permissionsList every regulated activity you will carry on. Every section of the plan ties back to them.
- 02Make every section specificName your people, your customers and your controls. A plan that could describe any firm reads as generic.
- 03Make the plan and the numbers agreeThe capital in the plan must match the forecasts, and the policies must match what the plan says.
Explore the chapters
Read them in order, or jump to the one you need.
01What the FCA expects from your business planYour business plan is not paperwork attached to the application. It is the document the FCA reads to decide whether your firm is ready, willing and organised, and a generic one is easy to spot.
02The 13 areas your FCA business plan must coverThe FCA's sample plan lists 13 areas. Write to its headings and a case officer finds what they need in minutes. Skip one and they come back to you with questions.
03How to write an FCA business plan, step by stepMost weak plans are written backwards: policies first, business model last. Turn it round and every section starts to agree with every other.
04Financial projections: what the FCA asks forYour numbers are evidence that the firm will have, and keep, enough resources. If the forecasts and the plan tell different stories, the case officer will notice.
05Capital, resources and wind-downHolding the minimum on day one is not enough. You have to show the capital survives your start-up losses, month by month, with a plan if things go wrong.
06The mistakes that delay FCA applicationsThe FCA has published the weaknesses it sees again and again. Most cause delay rather than refusal, but every request for more information adds weeks.
Chapter 01 · The starting point
What the FCA expects from your business plan
Your business plan is not paperwork attached to the application. It is the document the FCA reads to decide whether your firm is ready, willing and organised, and a generic one is easy to spot.
An FCA business plan is the regulatory business plan you submit with an application for authorisation. It explains your regulated activities, business model, governance, customer journey, risks, controls and capital, and how you will meet the FCA's minimum standards.
The FCA publishes a sample business plan. Its how-to-apply page describes the sample as the document that sets out what applicants need to cover, and the FCA is clear that a generic plan will not do: the plan must be specific to your activities and show how they match the permissions you are applying for.
explains each area we expect you to cover
The two threshold conditions the plan is tested against
The threshold conditions are the minimum standards a firm must meet when it is authorised and keep meeting afterwards. Two matter most for the business plan.
What each condition asks
COND 2.7: Business model
- Is the business model suitable for a regulated firm?
- What is its effect on consumers' interests?
- Does it fit the permissions requested?
COND 2.4: Appropriate resources
- Are financial resources appropriate to the activities?
- Are non-financial resources, such as people and systems, adequate?
- Do resources match the likely risks?
Read your plan three ways
Before anyone else reads it, check it describes the firm you are actually building.
- Does every permission we ask for map to something we will actually do?
- Could I explain any section without notes?
- Have we described risks to customers, not just risks to us?
The FCA reads the plan to judge whether the firm is ready, willing and organised.
- Can I find each of the 13 areas from the sample plan?
- Is this specific to this firm, or could it describe any applicant?
- Do the plan, the forecasts and the policies tell the same story?
- Does the business model look suitable (COND 2.7), and are the resources appropriate (COND 2.4)?
The people named in the plan will be asked about it, so the board should test it first.
- Can each person named explain their section without notes?
- Do the capital figures match the forecasts to the pound?
- If the forecasts slip by six months, do we still meet our capital requirement?
Chapter 02 · The structure
The 13 areas your FCA business plan must cover
The FCA's sample plan lists 13 areas. Write to its headings and a case officer finds what they need in minutes. Skip one and they come back to you with questions.
Using the sample's structure is not just tidy. The FCA's September 2025 good practice findings say firms should use the sample plan to check that all key information is included, which it says is especially relevant to small firms.
The 13 areas: tick off what your plan covers
Tick each area your plan already covers. Your ticks stay in this browser only.
| Generic (easy to spot) | Specific (what a case officer wants) |
|---|---|
| We have robust compliance controls. | Our compliance officer reviews every financial promotion before release and records the sign-off in the promotions log. |
| We treat customers fairly. | Customers who miss two payments are called within five working days by a trained agent, who checks for signs of vulnerability before agreeing next steps. |
| Senior management oversees risk. | The board reviews the risk register every quarter. The chief executive owns the top five risks, each with a named control owner. |
Chapter 03 · Step by step
How to write an FCA business plan, step by step
Most weak plans are written backwards: policies first, business model last. Turn it round and every section starts to agree with every other.
Most weak plans are written in the wrong order: policies first, business model last. Work the other way round. The permissions decide the business model, the business model decides the controls, and the controls decide the policies.
Who owns which part of the plan
Chief executive
Owns the business model, the permissions case and the plan as a whole. Must be able to explain any section.
Compliance oversight
Owns the compliance, complaints, training and policy sections, and the customer journey controls.
Finance lead
Owns the forecasts and the capitalisation section, and makes sure every number agrees.
Operations and technology
Owns the IT plan, outsourcing and the realistic delivery timeline the FCA asks for.
Four stages from blank page to submission
Stage 1 of 4
Scope
Decide exactly what the firm will do and which permissions that needs, then map the business model around it. Everything else in the plan ties back to this stage.
- Start with the permission list: Write down every regulated activity you will carry on and decide exactly which permissions you need. Everything else ties back to them.
- Draft the business model first: Map customers, products, revenue, third parties and money flows. Sections 5 to 13 flow from this.
Stage 2 of 4
Draft
Write each of the 13 areas in the order of the FCA's sample plan, naming the people and processes behind every control.
- Write to the sample's headings: It makes it easy for the case officer to find what they need.
- Name people and processes: Show who does what, when and how it is evidenced, rather than describing roles in the abstract.
Stage 3 of 4
Reconcile
Make the capitalisation section agree with the forecasts, and check the extra items listed for your firm type.
- Join the plan to the forecasts: The capitalisation section must agree with the financial information, and the numbers must match across documents.
- Check the page for your firm type: Sector pages list extra items, such as a wind-down plan for some firms.
Stage 4 of 4
Review and submit
Test the plan for gaps, generic phrasing and inconsistencies against the threshold conditions, then submit only final documents.
- Review it as a case officer would: Look for inconsistencies, generic phrasing and gaps against the threshold conditions.
- Submit only final documents on Connect: Register on Connect first, and submit only final, signed-off documents.
Illustrative example Not FCA figures. Use your own.
Generic plan or specific plan
Reads as generic
- Repeats FCA rules back to the reader
- Describes risks to the firm, not to customers
- Templated policies that contradict each other
- Roles with no named owners
Reads as your firm
- Explains how you will comply in your own setting
- Shows the risks your model poses to customers and how they are controlled
- Policies that match what the plan says
- Named people, time split and evidence
Chapter 04 · The numbers
Financial projections: what the FCA asks for
Your numbers are evidence that the firm will have, and keep, enough resources. If the forecasts and the plan tell different stories, the case officer will notice.
Every applicant must submit financial forecasts before the FCA can assess the application. The baseline is an income statement, a balance sheet and a cash flow statement for the whole legal entity. The FCA will not accept figures that cover only part of it.
| Term | In plain English |
|---|---|
| Income statement | Money earned minus money spent over a period: whether you made a profit or a loss. |
| Balance sheet | What the firm owns and owes on a given date, and the capital left over. |
| Cash flow statement | Cash coming in and going out, month by month. A profitable firm can still run out of cash. |
| Capital resource requirement | The minimum capital your firm must hold under the rules for its type. |
| Threshold conditions | The minimum standards a firm must meet to be authorised, and keep meeting afterwards. |
Base case: Revenue arrives as planned. Capital dips through the start-up losses but stays above the requirement every month.
Switch between scenarios. The forecast has to show capital above the requirement in every month of every scenario you can reasonably expect, with a plan if it does not.
Illustrative example Not FCA figures. Use your own.
What the FCA's financial information guide asks for
- An income statement, a balance sheet and a cash flow statement
- Forecasts for the whole applicant entity, not part of it
- Historical accounts if the firm is already incorporated and trading
- Notes to the accounts and the key assumptions behind the plan
- Share capital details and term sheets where a quantified prudential regime applies
- The correct sector Financial Data Template, chosen from its Guidance and Glossary tab
Twelve months or three years?
It depends on the form. The general guide sets three years as best practice, while some application notes are more specific. The practical answer is to meet the minimum for your firm type, then extend to a three-year view. A longer view also tests how the firm funds growth and whether capital stays adequate after year one.
| Item | What the notes ask for |
|---|---|
| Opening balance sheet | As at the start of trading as an authorised firm, showing how the firm meets its financial resources requirement at authorisation. |
| Forecast closing balance sheet | The position forecast after the first 12 months of trading. |
| Monthly cash flow forecast | Monthly cash flow for the first 12 months of trading. |
| Monthly profit and loss | 12 monthly forecasts, showing regulated and unregulated income separately, major overheads and profit before tax. |
| Existing traders | Latest year-end accounts and up-to-date management accounts. |
Chapter 05 · Staying solvent
Capital, resources and wind-down
Holding the minimum on day one is not enough. You have to show the capital survives your start-up losses, month by month, with a plan if things go wrong.
Your projections are evidence for one of the FCA's threshold conditions, the minimum standards every firm must meet: COND 2.4, appropriate resources. Resources include capital, provisions and liquid assets, as well as people and risk management tools. The FCA's guidance on adequate financial resources, FG20/1, says adequate resources let a firm operate through the economic cycle and wind down in an orderly way.
Factors the Handbook lists in COND 2.4.4G
- Any sign of difficulty complying with prudential rules, or of being unable to pay debts as they fall due
- Whether the firm has made enough enquiries to show it has access to adequate capital, including to cover start-up losses
- Whether client money, deposits and custody assets are protected if the business fails
- Whether resources match the likely risks
Building credible capital numbers
Cost the set-up properly
Include legal, compliance, systems and recruitment costs, and the FCA application fee. These and any start-up losses reduce capital before you trade.
Show capital in every period
Demonstrate how you meet the capital resource requirement from day one and through each forecast period.
Size your own headroom
The FCA sources do not set a buffer size, so size yours through stress testing and write down the reasoning.
Evidence the funding
Set out funding arrangements and commitments, with contingency plans. Smaller firms can use evidence such as bank statements.
- Systems and technology£35k
- Recruitment£30k
- Compliance£25k
- Legal£20k
Every one of these costs, plus the FCA application fee and any start-up losses, reduces the capital you hold before you trade. Put them in the opening position.
Illustrative example Not FCA figures. Use your own.
Chapter 06 · Before you submit
The mistakes that delay FCA applications
The FCA has published the weaknesses it sees again and again. Most cause delay rather than refusal, but every request for more information adds weeks.
From the FCA's good and poor practice findings
Poor practice
- Policies not tailored to the business
- Plans that miss likely customer scenarios, leaving gaps for vulnerable customers
- Unclear IT plans and unrealistic technology timelines
- Historic accounts missing from the initial application
- Not showing how people with several roles split their time
Good practice
- Using the sample plan to check nothing key is missing
- Explaining how decisions are made in the UK when operations are overseas
- Analysing why each permission is relevant to the activity
- Embedding the Consumer Duty across policies and controls
- Setting out funding commitments and contingency plans
An incomplete application can take up to twice as long as a complete FSMA one, so it pays to submit everything first time.
What happens after you apply
- Before applyingRegister on ConnectSubmit only final, signed-off documents.
- On submissionApplication fee paidRefunded only if the application is rejected for missing minimum information.
- Within 3 monthsUsual decision for a complete payments or e-money application
- Within 6 monthsStatutory period for a complete FSMA applicationSection 55V FSMA.
- Up to 12 monthsWhere the application is incompleteMissing information delays the assessment.
Questions for your board
- Can each person named in the plan explain their section without notes?
- Does every permission we request map to an activity in the business model?
- Do the capital figures in the plan match the forecasts to the pound?
- Where does the plan show risks to customers, not just to the firm?
- If our forecasts slip by six months, do we still meet our capital requirement?
Where this comes from
Sources
Every number and rule in this guide comes from these pages. Check them before you rely on anything, as rules change.
- FCA: How to apply for authorisation
- FCA: Sample business plan
- FCA: Good and poor practice in authorisation and registration applications (September 2025)
- FCA: Preparing your firm's financial information
- FCA: Preparing a wind-down plan
- FCA: Notes for the full consumer credit application (release 5, November 2023)
- FCA FG20/1: Assessing adequate financial resources
- FCA Handbook COND 2.4: Appropriate resources
- FCA Handbook COND 2.7: Business model
- Financial Services and Markets Act 2000, section 55V
This guide is general information, not legal or regulatory advice. Rules and FCA expectations change; check the sources and take advice on your firm's circumstances.