We hope this guide helps you if you are new to credit. Its not a be all and end all just our take on things. There are always exceptions just like anything in life.
Sole Traders & Partnerships
Finance companies can often make automated decisions here. They will have a point scoring system and each have their own considerations. Most people have heard of Experian for credit checking
– Experian check
– No missed payments even for something small and silly
– No CCJ and adverse. For example an outstanding gas bill from three years ago you missed.
– On electoral register – Register to vote
– Traceability. Often customers especially after a divorce for example live in many places.
If you had a bank statement sent to a parents house this is enough to be traced.
– Drivers license. Some finance companies require this. Also be sure that you have told us your driving license address in advance.
– Banks use their own credit check rather than experian. Thus even if you have a not perfect score with Experian you may well still get credit with some of our other bank related funders.
A Limited Company credit score is checked by an Adelphi Score which is the Experian version for companies. Of course new start companies won’t have one. Consider a few examples of a Limited Company. They look for payment history in the same way and CCJ.
Net Worth On Companies House
This is perhaps the main consideration. Its public information and if your company has high net worth credit is easier and oppositely too. Generally you can borrow 25% of your company net worth. If you already used that for buying another vehicle it may be harder.
They also look at the directors. If one or more of the directors has a lets say “colourful history” many lenders will still say no. Such as closing down lots of companies for example.
A company with say 10 years accounts, a great Adelphi score. It should in theory pass as long as the company hasnt over borrowed with other loans. A net worth of 500,00 K
2. Younger company
A company three years old with three sets of accounts and a net worth of 50,00. Its borderline
pass. It does depend on the strength financially of the director(s). Often they will ask for a personal guarantee.
3. A new start company 14 months old . There are no accounts, so zero net worth. There is no previous sole trader company. Its unlikely that the company will get credit without a guarantor