Been rejected for business account fair credit rating advice please

scarybigtoe

Hi I am starting a business with an employer. He has a business in OZ and I am bringing it to uk.

He came over at Easter and we went to HSBC to get account and got rejected. I got hold of my credit report and it is fair with a scor of 848. I have been told I am only 50 points off good. I have 2 defaults and a CCJ all 5.5 years old and since then not missed or had a late payment on anything.

I can only find one bank that will open account with out him in the country and that is Metro bank. I am worried that they will reject me and if they do what do I do then?

paddyrg

This all sounds a bit odd right now - is this guy an employer or partner? Is this a ltd company you're forming, or some murky mess with nothing clearly defined? Do you have seed cash? Why can this guy not get an account?

I am surprised you cannot get even a simple bank account (as no business startup will get a bank line of credit without personal guarantees anyway), there may be more to the story. Are they wary of the business sector?

Perhaps if you form a ltd co and apply for a simple account you will remove the personal element, clear up the management structure (partner vs employee) which may be making them jumpy, then maybe your own bank may consider it?

scarybigtoe

We have formed a ltd company we are 50% share holders and it isn't anything untoward. It's recruitment. He has a very successful recruitment company in OZ which I worked for before. I am opening the uk office as a director and share holder. He is putting up the money and we do not need to borrow any money just have a business bank account.

I am after some advice as he is now in OZ and i need a business bank account so I can start trading!

paddyrg

Thank goodness - it sounded from the OP like you were/weren't an employee and I was anxious for you. If it is all clear, great

It seems strange that a ltd co cannot get a basic bank account (no lines of credit, etc), but maybe it is just because of the international nature of things (it would, for instance, be a great front for money laundering cross-borders!). I guess the answer is to try Metro Bank and see what happens then?

It could be that they say he needs to be UK resident to be accepted as a director of a UK company, or something - in which case perhaps you could be sole director of xyzrecruitment (uk) ltd, with him as a straight shareholder?

BTW - 50/50 shareholding is a bit of a dud - it can lead to stalemates - you should give one of you the deciding vote, maybe 51/49 split, or 1 extra share to one of you.

paulwf

paddyrg wrote: »

BTW - 50/50 shareholding is a bit of a dud - it can lead to stalemates - you should give one of you the deciding vote, maybe 51/49 split, or 1 extra share to one of you.

Agreed, OP just read the many threads on here about why a 50/50 exact split is a bad idea. Being based halfway around the world from each other and then reaching stalemate over a decision isn't going to help move the business forward.

Mistral001

Perhaps just trying to satisfy HSBC might be an option. At least they have seen the Australian. Other banks might be warry of some Australian they have not seen.

CKhalvashi

Mistral001 wrote: »

Perhaps just trying to satisfy HSBC might be an option. At least they have seen the Australian. Other banks might be warry of some Australian they have not seen.

Also with HSBC, you can carry your credit rating with them worldwide, although this doesn’t extend to other banks.

With our Russian/Georgian/Armenian expansion in 2007, 2009 and 2011, they used our personal credit ratings and that of the company to base decisions.

CK

scarybigtoe

Mistral001 wrote: »

Perhaps just trying to satisfy HSBC might be an option. At least they have seen the Australian. Other banks might be warry of some Australian they have not seen.

They will not help unless these defaults have fallen off which is in Jan 2013. Metro bank can open an account apparently that only I will be able to access. Australian partner will be over in 6 months then we can get him added to bank account. I can not see 50/50 being a problem.

paddyrg

scarybigtoe wrote: »

I can not see 50/50 being a problem.

...The problem is people never do envisage problems in peacetime. If you have drawn up a legal pre-nup-equivalent maybe you will be ok, but unless you build in dominance from day 1 (it almost doesn't matter who it is either, but someone should be), silly small things can become bigger problems than they should be. I guess what I'm saying is that dictatorships are efficient, you know?

steve1980

scarybigtoe wrote: »

I got hold of my credit report and it is fair with a scor of 848. I have been told I am only 50 points off good. I have 2 defaults and a CCJ all 5.5 years old and since then not missed or had a late payment on anything.

Your score means nothing, it's three randomly generated numbers given by credit reference agencies so don't take any notice of it.

Give it another 6 - 12 months for the CCJ's and defaults to vanish.

paulwf

scarybigtoe wrote: »

I can not see 50/50 being a problem.

Please spend the time to go through this forum, there are a few threads about this. Alternatively seek advice from an accountant or solicitor. Better to get it sorted just in case.