Credit history issues: A way around?

I have opened a retail shop in a busy area, I am seeking a business bank account to enable credit/debit card payments. I currently have a very poor credit history but until 5 months ago it was very good. I have a partner with a good credit rating. Will she be able to apply if I make her a shareholder as I have chosen to make the company limited?

I’m not clear from your question whether your difficulty relates to opening a bank account or obtaining merchant services. Banks are required to follow the guidance contained in the Banking Code.

Applying to a bank for a current account for a business need not require the bank to extend overdraft facilities or to offer a loan.

However, what is appropriate will vary from case to case.

Your credit history might well be a source of information the bank will access to make its decision.

The bank would need to be clear of your partner’s involvement in the business.

Dependent on the business you have started and the trading situation to date they may ask to see a business plan to assess the likely conduct of the account in the light of your existing commitments.

Forming a limited company is unlikely to assist in this situation as the business is unlikely to have traded for sufficient time to have built up any assets. The bank will look at the track record of those involved in the business.

If you are applying for merchant services the bank will asses whether they are able to meet the business card processing needs.

This will involve looking at business plans and accounts, the businesses cashflow, profitability and other commitments, other personal commitments and information from credit reference agencies.



Adam Wayland

Adam Wayland

Adam was Editor of from 2006 to 2008 and prior to that was staff writer on sister publication BusinessXL Magazine.

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