Limited Company Credit Rating

[amcphillips]

I've just noticed via one of the banners on here that Ozzy's company offers quick company credit reports. If I incorporate my business today and then go try and get credit for my company tomorrow what will it put a) my companies credit score at and b) suggested borrowing limit?

Thanks for any answers

[amcphillips]

anybody?

[Alpha]

If you incorporate your business today and look at the credit score I would expect that

1) You would not find a report as they are based on filed accounts plus any other sources of info that can be found by the credit rating agency, and

2) That if you did try for credit probably most suppliers would ask for payment on or before delivery until you had built up sufficient trading history with them (anywhere from 6 months to 2 years) and that banks would look at your personal situation and their history of dealing.

[Ozzy]

Sorry I've been tucked up in bed for a few days so not been checking in.

A report for a newly filed company will only show your company directors and registered office address. This is because, as Alan says, no accounts or transactional information has taken place with your company.
A company needs to be 15 or so months old before anything interesting starts to show up on their credit history.

(imagine doing a personal credit check on a 6 month old baby - they wont have any credit history, same principle here)

[amcphillips]

Thanks for the reply. Not wanting to get into too many hypothetical scenarios but if for instance I incorporate today, what factors would a company consider when looking at an application for a Hire Purchase agreement? Unfortunately I don't own my own home so I can't put that down as security!

[Ozzy]

They would normally look for a directors guarantee, and your personal circumstances/assetts.

[cqueen]

Is this where the 'small firms loan gaurentee' scheme comes in?

[amcphillips]

SFLG does come in if a bank cannot finance it. They guarantee either 70 or 75% of the loan amount (can't remember which!) for which they charge an interest premium. The only doubt I have about this is that it's only £100k for a start up and that it excludes transport. I'll be in the leisure industry but it is to purchase vehicles so will it be excluded??? Time to phone some contacts I have at the DTI me thinks so I have the facts to speak to Mr Bank Manager about!!!

[Brin]

The SFLGS is not appropriate for the financing opf one vehicle. Don't bother trying, you will only look silly in the bank's eyes.

You may not get finance at all for the vehicle: you have an embryonic business trading through a limited company that you can shelve at any time, with no credit history. If you ask for credit of any form, you will be asked to give a personal guarantee, but even offering a pg does not mean that you will find someone willing to finance you.

[amcphillips]

It's actually for 6 vehicles which are central to the business operating, it isn't for a fancy company car! Although I still have a feeling that it won't make any difference!

[Ian J]

Depending on exactly what you will be doing it may be possible to arrange a package of funding based on factoring the company's debts with some asset finance thrown in for good measure but even if the business is "factorable" the funders still don't like offering facilities to non home owners, especially if the business is a startup and the principal is not putting anything in themselves.

[amcphillips]

I'm planning on being able to put £50k in myself so this works out at roughly 10-15% of the value of the assets plus another 20k in towards the day to day running of the business.