MW Maiden Property first accounts submission was performed under the "micro company" accounts type. This provides Companies House, limited information, but fully legal, to satisfy companies house requirements.
However, when the accounts are published on the Companies House web site, which can be viewed anywhere in the world, limited financial data is disclosed to the public. For example, the outstanding amount owed to creditors, does not contain a detailed breakdown, of who the companies creditors are.
Credit reference agencies such as experian , use this data, to produce a credit score for the business, along with other key data.
During the latest submission, I specificity asked for the accounts to be submitted as 'full accounts' which shows the Directors loan figure in the creditors field. After this change, for example , 370K owed to creditors, is now showing 250K owed to the director via the directors loan account , and only 120K owed to mortgage companies, business credit cards etc. As the director, choses the repayment schedule, and whether to charge interest on the loan he or she loaned to the company, this put 250K, of the 370K ,as a lower risk due to to the previously mentioned factors.
Many directors including myself, fund there company initially, from their income from a job they had previously, or current job, savings, investments, precious metals, crypto, shares. A new business, will struggle, to obtain large amounts of credit from lenders ,due to their companies turn over, a key factor which lenders use to establish risk, which at the start of a new business venture will be a zero or low turn over.
The downside, of the full accounts submission, is that the directors financial position is less hidden and private.
After the full accounts submission, the Experian credit file showed a move from Moderate Risk Score, to Low Risk, and the amount that can be borrowed from providers tripled.
If you are submitting micro company accounts, it may be beneficial to move to full, but please ,always consult an expert in accountancy before considering this change.
Michael Westhead
Owner/Company director