Opening a business account on HSBC for my Ltd

Entrepreneur_2

Business Plan Check
Investment Check
Setup company Check
Register for VAT Check
Open a bank account - Denied (with Satisfactory credit rating & debt free)

I need the account on HSBC since my investor (a Business) / future partner will earn 40% of the company and he banks with HSBC.

I went happily to open my business account, after 1 hour of filling in paperwork I leave the bank, they will call me on Monday they said.

4 days letter I get an email, and I copy paste:

Following your previous visit to the branch on Saturday afternoon we sorry
to advise you that we are unable to provide business banking facilities for
your company XXX XXX Limited due to an insufficient credit score on
your application

Although we are unable to disclose this information to you under the data
protection guidelines , we would strongly encourage all of you to obtain a
credit report. .

We are sorry we are unable to help on this occasion

Thanks and regards.


I obtained the credit report, my credit cards & other bank account checked in fine.

I emailed telling him my credit report was "Satisfactory"

Here is his late reply

Apologies for the delay in reply


As I mentioned earlier , we are unable to access these detail in a report
as a result of strict data protection guidelines

Therefore, any specific information about your credit score can only be
obtained at your own request to a credit reference agency

HSBC Bank is committed to helping small businesses and will continue to do
so responsibly .

We are sorry we are unable to help on this occasion.

Thanks and regards.



So lets recap, I have a clean credit rating, I have the investment (I dont need to borrow any money) and they declined me.

To make things worst they say "HSBC Bank is committed to helping small businesses and will continue to do so responsibly ."
:rotfl::T


Any advice/thoughts would be greatly appreciated, I knew starting a business for the first time was hard, but this seems simply unfair?


Thanks

Premier_2

Entrepreneur wrote: »

...I need the account on HSBC since my investor (a Business) / future partner will earn 40% of the company and he banks with HSBC....

:huh:
Could you explain further please? What does it matter who your investor/business partner banks with?

As to the credit score, it's not clear as who they are referring has an insufficient credit score. I guess they mean the brand new legal entity which is the limited company. (but worth checking)
Sure it won't have any adverse credit history .... but it won't have any credit history at all, and that's when the computer says no.

Unless you can get someone to over-ride the computer, your only option would be to go elsewhere. A smaller financial institution may be more likely to have someone empowered to over-ride the computer

Entrepreneur_2

Hi Premier,

Sorry I forgot to add, the investor is a Taiwanese company, HSBC has a close relation with the country (unlike other banks) and transactions between them are quick. They are also the people I buy my stock from.

It makes no sense that I get refused because its a new company, it feels quite unfair too.



Hope this helps

Thanks for your time

paulwf

Do you 100% own the Ltd or is the Taiwanese investor a shareholder?

Entrepreneur_2

At the moment I own it 100%. but we will do a 40-60 split and they will be added as a Director.

I cant split the company until the account is setup.


Thanks

Pennywise

One of two reasons...

Firstly, it won't just be a "credit history" they check - it will include other things concerning proof of identity etc. Are you registered to vote at your current address? Does your credit history file agree exactly with your bank application as regards current and past home addresses? Are all your other personal details exactly right on the bank application, i.e. national insurance number, date of birth, telephone numbers etc. You have to remember that most checks will be electronic - i.e. the bank's computer system checking against the third party credit/id check system - as with any database checking, the computer will just throw up a rejection if the details aren't exactly right - they don't have a human intelligence to check for simple mistakes, i.e. mis-spelt address or a digit wrong on an NI number. Get your credit file and check absolutely every last thing against your copy of the bank application form. Are Co House records exactly in accordance with the info you gave HSBC, i.e. reg office address, directors, shareholders, etc?

Secondly, a lot of business account applications are rejected because of the third party involvement of investors, shareholders, directors, etc. I appreciate you say you havn't appointed the foreign firm as a director/shareholder yet, but did you tell the bank about them and give the bank any details of them? If so, it could well be that your investor is the one who's failing the credit/ID checks. I know you think you know them and that they're "trusted" by HSBC, but how do you know that HSBC don't know something about them that you don't?

Entrepreneur_2

First of all :T loads of points for me to think about

I am living temporary in the city but I am moving back to my girlfriends house next month (Where I lived before moving to the city for about 6 years, and where I am registered to vote) The address I gave the bank is the one in London, and I am not registered to vote, I will change my address in my HSBC personal account to my girlfriends account.

The Taiwanese company is very well known name (think HTC, Acer..) and they have a very strong honest and fair ethic (they are still a family run company), but who knows, maybe this doesn't matter.

I gave Company Co my accountants address until we can get things setup, wonder if this made a difference.


Thanks again for your help, have taken all your advise on board

Pennywise wrote: »

One of two reasons...

Firstly, it won't just be a "credit history" they check - it will include other things concerning proof of identity etc. Are you registered to vote at your current address? Does your credit history file agree exactly with your bank application as regards current and past home addresses? Are all your other personal details exactly right on the bank application, i.e. national insurance number, date of birth, telephone numbers etc. You have to remember that most checks will be electronic - i.e. the bank's computer system checking against the third party credit/id check system - as with any database checking, the computer will just throw up a rejection if the details aren't exactly right - they don't have a human intelligence to check for simple mistakes, i.e. mis-spelt address or a digit wrong on an NI number. Get your credit file and check absolutely every last thing against your copy of the bank application form. Are Co House records exactly in accordance with the info you gave HSBC, i.e. reg office address, directors, shareholders, etc?

Secondly, a lot of business account applications are rejected because of the third party involvement of investors, shareholders, directors, etc. I appreciate you say you havn't appointed the foreign firm as a director/shareholder yet, but did you tell the bank about them and give the bank any details of them? If so, it could well be that your investor is the one who's failing the credit/ID checks. I know you think you know them and that they're "trusted" by HSBC, but how do you know that HSBC don't know something about them that you don't?