PE Solutions Credit Checks & New Business Contracts

No.

A credit check and a credit rejection are not the same thing.

The supplier can check the business and still decide to offer a contract.

What matters is the supplier's assessment of the application.

Different suppliers can also make different decisions about the same business.

A business being declined by Supplier A does not automatically mean Supplier B will decline it.

That is one reason we do not stop looking simply because one supplier says no.

Potentially, yes.

Being a new business does not automatically mean you cannot obtain a business energy contract.

PE's own website actively provides a route for new customers looking for its business products.

The difficulty for a new business is that there may be less trading and credit history for a supplier to assess.

That is different from saying the business has bad credit.

If you have only just incorporated, opened a premises or started trading, tell us that at the beginning.

We can look at the position as a new business rather than pretending there is years of trading history that does not exist.

These get mixed together all the time.

A new company may have very little credit history because it has only just started.

That does not automatically mean it has bad credit.

A long-established business can have a poor credit history.

A new business can have no meaningful trading history.

Those are different situations.

Tell the supplier or broker the truth about the business.

Do not invent trading history to make an application look stronger.

Possibly.

But we will not promise it.

PE's current terms confirm that credit checks form part of its contracting process.

They do not publish a simple public credit-score threshold on those terms that lets us say:

“Above this number you pass.”

or:

“Below this number you fail.”

In our experience, PE can be useful for some customers who have struggled with other suppliers' credit requirements.

The sensible approach is therefore to check the individual business rather than trying to predict the answer from a generic online credit score.

That does not necessarily mean every supplier will.

Ask why the application failed if the supplier or broker can tell you.

Then check the information that was submitted.

Was the correct company used?

Was the correct company number used?

Is the trading address right?

Is the business newly incorporated?

Was the application made for a different legal entity?

Is there a genuine credit issue?

Was there missing information?

Do not keep submitting incorrect information to different suppliers.

Fix the underlying information first.

Then look at which suppliers may be suitable.

This sounds obvious.

It causes more problems than people expect.

Before applying, establish exactly who is responsible for the premises.

For example:

• Limited company
• Sole trader
• Partnership
• Charity
• Club
• Individual trading as a business

Do not use a previous occupier's company.

Do not use a director's old company because it has a longer credit history.

Do not use a related business simply because you think it will pass a credit check more easily.

The contract needs to reflect the correct customer.

For a limited company, make sure the legal company information is correct before the application is submitted.

Check:

• Full registered company name
• Company number
• Registered address
• Trading address
• Supply address
• Contact details
• How long the business has been trading
• The energy supply details

A small spelling mistake is one thing.

Submitting the wrong legal entity is another.

If the business has only recently incorporated, say so.

PE's current terms say its credit checks include personal credit checks if the customer is a sole trader or an unincorporated partnership.

So if you trade as a sole trader, do not assume the supplier will look only at a business name.

Read the credit-check and data provisions in the applicable PE terms before agreeing the contract.

PE's current terms specifically address this.

They say credit checks can include personal credit checks for an unincorporated partnership.

The terms also say that the person signing the agreement warrants that they have obtained the necessary data-protection consents for the lawful performance of those checks on the other partners.

If you are signing for a partnership, do not treat that as a box-ticking detail.

Make sure you have authority to enter the agreement and understand the applicable terms.

Do not assume that PE's sole-trader wording automatically applies to every director of a limited company.

PE's current terms specifically mention personal credit checks for sole traders and unincorporated partnerships.

We have not used that wording to claim that every director of every limited company will receive a personal credit check.

If personal credit information is important to your decision, ask PE what will be checked for the specific application before proceeding.

The exact information required can depend on the business and supply.

Before trying to arrange a contract, it is useful to have:

• Correct legal business name
• Company number where applicable
• Registered address
• Trading address
• Supply address
• Contact name
• Contact telephone number
• Contact email
• MPAN for electricity
• MPRN for gas
• Current supplier if known
• Latest bill if available
• Current meter reading
• Expected or historic annual consumption where available
• Date you became responsible for the premises

If you have just moved in, keep evidence of the Change of Tenancy as well.

Do not delay getting the basics together because the business is new.

That is common when taking over premises.

Start with what you do have.

Take photographs of the electricity and gas meters.

Make sure the meter serial numbers are visible.

Record the readings and date.

Keep your lease, completion or occupancy information.

Find out who currently supplies the premises if you can.

If PE already supplies the property, the first issue may be Change of Tenancy rather than a normal renewal.

When you take responsibility for premises already supplied by an energy supplier, you may initially be supplied under a deemed arrangement.

That is not the same as agreeing a normal fixed contract.

If PE is the existing supplier, check:

• The Change of Tenancy
• Opening meter reading
• Date of responsibility
• Current tariff
• Current rates

Then compare the fixed options available.

PE currently publishes Standard Out of Contract & Deemed Rates.

Pubs can sometimes be more difficult to place with certain suppliers, particularly where the business is new or there is limited trading history.

That does not mean a pub cannot get a contract.

In our current experience, PE can be worth checking for businesses in sectors that some suppliers may treat more cautiously.

We would still check the actual business.

For a pub, have the correct legal entity, premises details, meter information and expected consumption available.

Do not promise PE acceptance.

The same principle applies.

A newly opened restaurant may have little trading history but potentially significant electricity or gas consumption.

That makes it important to get the estimated consumption reasonably realistic.

Think about:

• Kitchen equipment
• Extraction
• Refrigeration
• Freezers
• Dishwashing
• Heating
• Air conditioning
• Opening hours
• Gas cooking where applicable

Do not deliberately understate the expected consumption just to make the annual cost look smaller.

PE publicly identifies Healthcare, Sports & Leisure among the industries it serves.

Whether an individual application is accepted still depends on the business and PE's current requirements.

For clubs, make sure the legal customer is clear.

A limited company, members' club, charity and individual operator are not interchangeable simply because they use the same premises.

PE publicly lists Agriculture among the industries it serves.

For an agricultural supply, consumption can be very different from a normal office.

Examples include:

• Milking
• Refrigeration
• Cold storage
• Grain drying
• Pumps
• Irrigation
• Workshops
• Seasonal equipment
• Half-hourly supplies
• Several meters across one farm

If you have several supplies, do not assume the same contract structure is best for every meter.

Give us the actual bills and consumption where possible.

This is important.

Getting accepted by a supplier solves one problem.

It does not automatically answer:

“Is this a good contract?”

If PE accepts the business, still check:

• Unit rate
• Standing charge
• Other applicable charges
• Contract length
• Estimated annual cost
• Payment terms
• Contract dates

And remember that PE quotations can show fixed costs across separate charge lines.

Do not accept a contract purely because you are relieved somebody said yes.

PE can present fixed costs across different charge lines.

That means the line labelled Standing Charge should not automatically be treated as the complete fixed daily cost.

Depending on the quotation and supply, there can be separate distribution, transmission, capacity or other applicable charges.

For a proper comparison, establish the complete cost structure.

If another supplier rejected you but PE accepted you, that does not mean you should stop checking the numbers.

Acceptance and price are two different questions.

Check the payment requirements on the actual PE quotation and contract.

Do not assume every contract has identical payment terms.

If Direct Debit is required, make sure the business can comply with that requirement before signing.

Do not publish a blanket statement that every PE customer must use Direct Debit unless that is verified for the specific product.

Do not assume either way.

PE's current general credit-check wording does not give us a simple public rule that every new or higher-risk business will or will not be asked for security.

If PE makes an offer subject to a deposit, security requirement or other condition, check:

• The amount
• Why it is required
• When it is payable
• Whether it is refundable
• When it can be returned
• What the contract says

Do not pay money based only on an unexpected phone call.

Verify the request through PE or the broker handling the contract.

PE declining the application does not automatically mean there are no options left.

First establish whether the problem can be identified.

Then look at other suppliers.

We work with a panel of UK business energy suppliers and supplier acceptance criteria differ.

The next option might involve:

• A different supplier
• Different payment requirements
• More information about the business
• Correcting an application error
• Providing information that was missing

Do not keep changing the business details simply to force an acceptance.

Tell us:

• Business name
• Company number if applicable
• Business type
• Supply address
• Whether you have just moved in
• Current supplier if known
• Whether another supplier has already declined you
• Electricity, gas or both
• And send a bill if you have one.

If you do not have a bill, meter photographs can still be useful.

Do not send us passwords.

Do not send unnecessary personal financial information unless we specifically explain why something is required for an application.

A lot of the time somebody comes to us after being told no.

That does not mean we can magically make every supplier accept the business.

We can't.

What we can do is understand what we are dealing with.

Is it a brand-new company?

A pub?

A restaurant?

A business with previous credit problems?

A sole trader?

A company that has simply been submitted under the wrong details?

Then we can look at the suppliers and options that make sense.

PE is one of the suppliers we would consider in some of these situations based on our current experience arranging contracts.

But if PE is not right for the business, we keep looking at the other appropriate options on our panel.

I've had plenty of customers tell me:

“Nobody will take us.”

Normally what that actually means is one or two suppliers have said no.

That isn't the same thing.

New businesses are a good example.

If you've opened a pub three weeks ago, you obviously haven't got three years of trading history.

That doesn't make you a bad business.

It makes you a new business.

PE has been useful for us with some customers who have been harder to place elsewhere, including new businesses and sectors that other suppliers can sometimes be more cautious about.

But I want to be very clear about something.

I wouldn't tell you PE doesn't credit check.

Their current terms specifically say they carry out reasonable and proportionate credit checks.

And I wouldn't tell you they'll definitely accept you.

We check.

The other mistake is being so pleased somebody has accepted the business that you forget to check the contract.

Being accepted is good.

Being accepted onto a contract that actually makes sense is better.

So once we know PE will take the business, we still check the rates, the charges and the contract properly.

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