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Free Company Credit Check
What's your limited company credit score?
This free company credit check service requires no email or sign up.
When you credit check a limited company our credit reports include a credit risk score and a maximum credit limit guideline.
If you'd like an idea of some of the factors that would be used to check a company's credit status this will give you a general idea of how credit risk algorithms work.
We don't collect or record anything entered here – this is just for demonstration purposes, and no email address is requested at the end, the credit score is presented for you to see.
Any UK company can be searched online free. Reports on all UK companies are available online and it is also possible to run a credit check on non-limited businesses.
A limited company is easily identified because it must specifically have the word Limited or the abbreviation Ltd after the name, or PLC for public limited companies. In addition, every incorporated company has a unique individual company registration number. A company can change its name, but the number remains unchanged, so ultimately it is the company registration number that identifies the legal identity of the company.
When you run a credit check on a company the score and rating will be determined by a range of factors.
Latest Accounts
One of the main elements of a company credit check is the financial status of the company, and this is determined predominantly by an analysis of the financial accounts. Limited companies are required to file annual accounts.
Filing requirements are less onerous nowadays, and directors of small companies are not required to file audited accounts. Small companies have the option whereby the directors can submit unaudited accounts based on figures from their own accounting systems. The directors are not required to have the figures assessed and signed off by a qualified accountant who confirms the accuracy and reliability of the figures in an attached auditor’s report. This obviously saves small companies from the burden of an annual audit and the associated accountancy fees. Larger companies do not benefit from this exemption and are required to produce audited accounts.
The amount of financial information that has to be disclosed in the accounts is also dependent upon the size of the company. Filing requirements are determined by three criteria: company turnover, balance sheet total, and number of employees.
Credit Risk
If a company is new then statistically it represents an increased credit risk. The credit score is likely to be lower for a business with little track record. If no accounts are filed then it may not be possible to assess what resources the company has.
Turnover
Turnover is the total sales during the period, excluding VAT. Turnover includes all domestic sales and all export income if the company does any trade overseas. Not all companies will disclose this figure as the Companies Act, which determines the legal obligations for UK limited companies, includes provisions that exempt most companies from disclosing full accounts including turnover.
Profit and Loss
Larger companies are required to file a profit and loss account which details income from sales, and overheads and operating costs, and the resulting profitability. There are some companies which are classed as being intermediate scale operations and these may be exempt from disclosing turnover but file the costs and profitability figures.
Balance Sheet
The smallest entities are exempt from disclosing much beyond the balance sheet figures. The balance sheet presents the company's assets and liabilities. Assets will include fixed assets, which in general terms can loosely be considered the more permanent resources such as buildings and equipment, and current assets which is cash and other assets potentially realizable for short-term cash, such as payments due to be received on invoices and stock being prepared for sale. Liabilities are similarly presented as either long-term or short-term according to whether they are due within 12 months or after more than a year.
Credit Worthiness
The information filed by a company is free to check for credit worthiness and other due diligence purposes. This data will appear in a company credit report and is analysed. For credit risk assessment purposes there are several areas in the accounts that are scored.
Liquidity
One of the most fundamental credit indicators to check will be short term assets and liabilities. This will gauge liquidity. Liquidity is the term used to describe the amount of cash that can easily be made available when required to pay invoices and other day to day obligations. This short-term liquidity is of most interest for credit control and this is what credit controllers need to know when assessing how promptly a customer is likely to be able to settle invoices when due. If a company has weak liquidity then it may be operating from hand to mouth and be continuously reliant on its own income stream and payments from its own clients in order to finance payment of debt obligations. A credit report which identifies poor liquidity would be the flag for the credit controller to limit and monitor credit terms and control credit limits very closely if they decide to extend credit.
Solvency
The total on the balance sheet refers to the figure usually called net assets or shareholders funds. Net assets and shareholders funds are essentially the same figure, but both are usually presented on the balance sheet. Net assets are the result of all assets minus all liabilities and shareholders funds arrives at the same figure but expressed as the total of share capital and all retained profits and other company reserves.
The solvency of the company refers to the total net assets which is the amount remaining when all liabilities have been subtracted from total assets. The long-term financial status can be undermined if debt is not adequately covered by assets. If debt exceeds assets and net assets is a negative figure, then a company is insolvent. For credit checking purposes a credit report that highlights issues with solvency would have a significant adverse impact on the credit score.
Profit
Profitability is the surplus cash remaining after all trading expenses and borrowings have been met. The initial trading profit will be profit before tax on which corporation tax is calculated, after which is profit after tax. From the amount remaining after tax, the shareholders who may also be directors, may receive a dividend. After tax and any distribution of dividends, any retained profit remaining is carried forward to the company reserves. If a company is a small company and is not therefore required to present a full profit and loss account, then our credit reports will use algorithms to assess the retained profit carried forward in combination with other movement on the balance sheet as a signal for underlying profitability.
Payment Records
A First Report credit check includes payment information from suppliers and creditors. How promptly a company is able to pay its current trading partners can be a valuable decision-making tool and contributes to the credit scoring process. Payments may become overdue and invoice terms be exceeded before the situation results in creditors taking action to recover money through a country court judgment.
CCJ Search
CCJs are county court judgments. These occur when a creditor has not received payment and has referred the matter to the courts. Our credit reports include a search for CCJs. A county court judgment against a company will usually impact the credit rating.
Corporate Insolvency
Corporate insolvency procedures can take the form of administration, creditors' voluntary liquidation (CVL), winding up petitions and orders, a members’ voluntarily liquidation (MVL), receivership, a company voluntary arrangement (CVA), and liquidation.
As one of the most established UK business credit reference agencies our reports and analysis are the result of vast experience.
A search on any company is free and as well as limited company credit checks we provide non-limited business credit reports on sole traders and unincorporated businesses.