Has COVID-19 Impacted Your Company’s Credit Rating?

We all know how difficult COVID-19 has made running a business over the last year and one of the side effects has been the impact on credit ratings ...

There are several credit rating agencies out there and their first port of call is usually the filings at Companies House. Anything within filed financial statements such as a reference to going concerns in an audit report, or simply that the balance sheet is showing negative reserves, will be noticed.

This leads to a downgrade in credit ratings. However, the agencies will also look at other factors (including trends) where the information is freely available such as:

- The time it takes for customers to pay
- How long it takes the business to pay its suppliers
- Cash flow and level of borrowing
- Defaults on loan payments
- Not paying HMRC on time
- The data and financial stability of other companies that the directors are associated with
- The credit scores of directors themselves

One other important factor to consider is the late filing of documents at Companies House. Not only will they lead to penalties, but the credit rating agencies only ask themselves why and mark you down.

We have recently come across a few businesses that have been unfairly marked down by the agencies. We can't always perform miracles, but we do have a great contact within a firm specialising in improving company credit ratings where it can legitimately be done.

If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.