Limited Companies and Credit Check issues

[jgordon]

Hello everyone

This is my first post in the A1 Business Forum

Basically, I have a query regarding Limited Companies and Credit Checks, namely checks from banks and other financial institutions, not so much suppliers.

Since I was 14 I have been running my own online business from my parents home. It has been run in my mothers name for technicalities sake, since I could not pass a credit check at that age, so things like Bank and Merchant account are in her name. Since there were no assets or debts as such through the business at that time, sole trader was the way to go....

I am now 17 and the business has grown considerably since it began; we are VAT registered and also in (rented) business premises.

My question is, if I become a limited company, with either solely myself, or both myself and my mother, as the director, would I be able to obtain a loan, overdraft or a merchant account (which obviously all require a credit check)? Is the credit check carried out on the Company itself, or on its Directors? or both?

Thanks for any advice

[LOS Design UK]

My question is, if I become a limited company, with either solely myself, or both myself and my mother, as the director, would I be able to obtain a loan, overdraft or a merchant account (which obviously all require a credit check)? Is the credit check carried out on the Company itself, or on its Directors? or both?

Thanks for any advice

Check your credit file for free and see if you have any history on there.

As for will you get owt? Dunno, not qualified to answer that, too many factors as well.

[ecigworld]

I think it will be done on the company accounts.


BTW... Well done on your business skills in getting where you are.

[stephendoyle]

Hello everyone

My question is, if I become a limited company, with either solely myself, or both myself and my mother, as the director, would I be able to obtain a loan, overdraft or a merchant account (which obviously all require a credit check)? Is the credit check carried out on the Company itself, or on its Directors? or both?

Thanks for any advice

it depends on the company who you are asking.

i always check my prospective clients to make sure that i am paid mainly and to see what level of business they are.

my checks using my barclays software show the company and any payment history etc.

normally if it is a ltd company it is just the company and if it is a sole trader it's the owners who are checked.

other companies i know of may well ask for ID of the directors as well if ltd.

good luck
Stephen

[James Smith]

JGordon,

The bank will generally credit check the directors. Ant debt will be personally secured - which means being over 18.

Its great that your parents have been supportive to the point of paying your tax bill given its all in their names - but now you are over 16 you could declare the incomes in your own name which would probably work out from a tax point of view. Hopefully your have a decent accountant looking after this for you.

Regards,

[miggy282]

well if your a new start up business obviously you will have no credit history so the finance companis will resort to checking the directors history, i've been in this sisuation before...there are some companies that take on new business with no history but it depends what your getting on credit

hopes this help