Business energy prices are dependent on several factors. Where in the country your business is located, the number of sites, the volume of gas or electricity used by your business – and a low credit rating.
A low credit score won’t necessarily affect your energy prices at home. However, it is a very different story for business customers. This is due to the larger volumes of energy used and greater potential risk to suppliers.
What do energy companies look for?
Energy companies will be wary about taking on a business that consumes a large volume of energy alongside a low credit rating. They will want assurances that the customer will remain in business for the length of the contract. The business needs to meet credit criteria set by the energy companies. If you do, they will offer the lowest gas or electricity tariff they have available.
Experian have a free 30-day trial to check and improve your business credit score
Business energy prices by sector: gas and electricity prices in your industry
I have a low credit rating, how will this affect my business energy contracts?
You may have to avoid energy suppliers who require higher credit scores. This will mean you won’t be able to access the lowest energy prices available. However, there are over 30 energy companies out there, so shop around. A good energy broker with relationships across the whole energy market will be able to help you. Some suppliers have a lower credit threshold than others for accepting new business customers.
A business may be asked for a deposit before an energy contract is offered. Depending on your estimated contract cost, this may or may not be affordable to you. The deposit will be repaid in full, either after 12 months or at the end of the contract, providing you pay the bills on time every month.
Energy companies may offer you a contract, but not at their lowest prices, or on a shorter contract term. You should compare these prices against those from suppliers with less stringent credit criteria.
How can I improve my business credit score?
A number of energy companies use Experian to check credit scores. A good place to start therefore, is to determine your business credit score from Experian. This is a worthwhile exercise, as you may disagree with the score they have given your business. Credit agencies can make mistakes, and you will just need to provide some information on your business for them to correct your rating. Additionally, their advisors can give you tips on improving your credit rating, but the main areas to check are:
- File your accounts on time at Companies House
- Keep up to date with all your payments
- Where possible, pay by Direct Debit
- Sole Traders and Partnerships will also be judged on your personal credit score
- Repay any business loans on time
A low business credit score can result in energy companies refusing to offer your business an energy contract. Or only offer you higher energy prices. At Perfect Clarity, we help businesses of all sizes, including those with very low credit scores. Our experience and exemplary relationship with energy companies has helped hundreds of business with poor credit ratings to get better gas and electricity prices.
Perfect Clarity can help businesses save money on their energy and water contracts. Call 020 3372 6517 for more information.