198. Exceptions For Money-lending Companies

(1) Approval is not required under section 186 (loans to directors), 187 (quasi-loans to directors) or 189 (loans or quasi-loans to persons connected with directors) for the making of a loan or quasi-loan, or the giving of a guarantee or provision of security in connection with a loan or quasi-loan, by a money-lending company if–
(a) the transaction (that is, the loan, quasi-loan, guarantee or security) is entered into by the company in the ordinary course of the company’s business, and
(b) the value of the transaction is not greater, and its terms are not more favourable, than it is reasonable to expect the company would have offered to a person of the same financial standing but unconnected with the company.
(2) A “money-lending company” means a company whose ordinary business includes the making of loans or quasi-loans, or the giving of guarantees or provision of security in connection with loans or quasi-loans.
(3) The condition specified in subsection (1)(b) does not of itself prevent a company from making a home loan–
(a) to a director of the company or of its holding company, or
(b) to an employee of the company,
if loans of that description are ordinarily made by the company to its employees and the terms of the loan in question are no more favourable than those on which such loans are ordinarily made.
(4) For the purposes of subsection (3) a “home loan” means a loan–
(a) for the purpose of facilitating the purchase, for use as the only or main residence of the person to whom the loan is made, of the whole or part of any dwelling-house together with any land to be occupied and enjoyed with it,
(b) for the purpose of improving a dwelling-house or part of a dwelling-house so used or any land occupied and enjoyed with it, or
(c) in substitution for any loan made by any person and falling within subsection (4)(a) or (b).