Business energy with bad credit or no trading history: deposits, suppliers and your options

A poor credit rating or a newly incorporated company does not automatically prevent a business from obtaining an electricity or gas contract.

However, it can reduce the number of available tariffs or cause a supplier to request extra security. Depending on the customer, supplier and expected annual bill, the outcome could be:

• Acceptance on the advertised terms
• Acceptance only with a Direct Debit
• A refundable security deposit
• An advance payment towards future bills
• A personal or parent-company guarantee
• A bank guarantee or bond
• More frequent billing and shorter payment terms
• A different tariff or a higher price
• A prepayment arrangement where available
• Rejection of the application

There is no definitive list of UK business energy suppliers that will accept every applicant with bad credit. Suppliers use different credit thresholds, credit insurers and risk policies, and those policies can change without notice. One supplier may decline a company that another accepts with a deposit.

The best approach is to establish why the business appears risky, prepare evidence that addresses the concern and compare conditional offers from several suppliers. Do not compare the unit rates alone: the size, return terms and cash-flow effect of a deposit can materially change which contract is best.

If you are ready to obtain prices, compare business energy tariffs using the correct legal entity and an accurate estimate of each site’s consumption.

Can a business get energy with bad credit?

Yes, in many cases.

Business energy suppliers are extending credit because they normally supply electricity or gas before receiving payment. They therefore assess the risk that charges will accumulate and remain unpaid.

A supplier can respond to that risk in several ways rather than simply saying yes or no. A conditional offer may allow the business to contract if it pays a deposit, agrees to automated payments or provides an acceptable guarantee.

Ofgem’s non-domestic security-deposit guide recognises that a deposit can enable a supplier to make an offer where it has identified credit risk. However, the guidance is voluntary and does not require a supplier to accept an applicant.

The supplier normally decides:

• Whether the customer passes its assessment
• What information it requires
• Whether an alternative form of security is acceptable
• How much deposit it requests
• Which tariffs and payment methods are available
• Whether the application must be declined

A business is not entitled to a particular fixed tariff merely because it needs energy. If a live premises is already being supplied and the occupier uses energy without agreeing a negotiated contract, the registered supplier will usually charge the occupier under a deemed arrangement. This maintains supply but can be considerably more expensive than a negotiated tariff.

Ofgem’s guide to setting up a business energy contract confirms that a deemed contract can arise when a business moves into premises and consumes energy before agreeing a contract.

Bad credit and no credit history are different

A new company with no filed accounts is not necessarily a bad payer. It simply gives the supplier less evidence on which to assess the risk.

Credit position	What it may indicate	Likely supplier concern
Newly incorporated company	No filed accounts or payment history	Insufficient evidence to predict payment
Thin credit file	Very little borrowing or trade data	Score may be uncertain or credit limit low
Low commercial score	Model identifies a higher probability of default	Bills may not be paid on time
Low recommended credit limit	Business may be sound but small relative to the contract	Expected energy exposure is too large
Late payment history	Existing suppliers have been paid slowly	Future invoices may become overdue
County Court Judgment	A creditor has obtained judgment for unpaid money	Serious adverse payment evidence
Insolvency event	Administration, liquidation, CVA or connected failure	Increased risk of non-payment or business failure
Incorrect credit data	File contains outdated or mismatched information	Automated decision may not reflect the true position

This distinction matters. A well-funded start-up may overcome a lack of history by providing management accounts, proof of funding and a deposit. A long-established company with unresolved judgments and repeated defaults may face a more difficult assessment even if it has substantial turnover.

What business energy suppliers check

There is no single universal business energy credit score.

A supplier might obtain a commercial report from a credit reference agency, apply its own internal scorecard, consult a credit insurer or carry out manual underwriting. Larger contracts can receive more detailed financial scrutiny than a small shop with modest consumption.

Ofgem says a creditworthiness process may include credit checks, an individual assessment of the financial risk and, particularly for larger consumers, an independent assessment by an insurance underwriter.

The assessment may consider:

Information	Why it matters
Legal name and company number	Ensures the correct entity is assessed
Incorporation date	Shows how long the company has existed
Filed accounts	Indicates assets, liabilities, liquidity and performance
Filing history	Late filings can suggest weak administration or distress
Payment performance	Shows whether other trade bills are paid on time
CCJs and insolvency records	Identifies serious adverse events
Recommended credit limit	Compares the company’s capacity with expected exposure
Existing supplier history	May show reliable or late energy payments
Internal group history	A supplier may consider other accounts held by connected entities
Expected annual energy cost	Determines how much unpaid exposure could accumulate
Billing frequency	Monthly billing usually limits exposure compared with quarterly billing
Payment period	A shorter period reduces the amount outstanding at one time
Payment method	Direct Debit can reduce collection risk
Sector and business model	Some activities are considered more volatile than others
Site and meter type	Complex or high-volume supplies may create greater exposure
Contract length	A long fixed agreement can create more future exposure
Ownership and group support	A strong parent may be able to provide a guarantee
Previous applications	Multiple searches or inconsistent details may require explanation

Companies House guidance on commercial credit information explains that credit agencies combine public data with sources such as trade-payment and business-directory information. The ultimate credit decision remains the supplier’s own decision.

Credit score is not the only test

A business can have a reasonable headline score and still be asked for security if its recommended credit limit is low compared with the energy contract.

For example, a small company might have an otherwise clean record but an estimated monthly energy bill of £10,000. The supplier could decide that its potential exposure is too high for the company’s balance sheet or available credit limit.

Conversely, a low automated score does not always end the application. A manual underwriter may accept current information that has not yet appeared in filed accounts, such as:

• A recent equity investment
• A substantial cash balance
• Signed customer contracts
• Profitable management accounts
• A strong parent company
• A reliable payment record with the incumbent supplier
• A suitable deposit or guarantee

Does a business energy check affect your credit score?

It depends on the search and the credit agency used.

Some supplier terms state that a search footprint can be placed on the business credit file and may be visible to other organisations. Other checks may not have the same effect. Ask the supplier or broker before it submits an application:

1. Which legal entity will be checked?
2. Which credit reference agency or insurer will be used?
3. Will the search leave a visible footprint?
4. Will directors, partners or guarantors be checked personally?
5. Is the initial quotation based on a search or only the final application?
6. Can an indicative underwriting view be obtained before a formal application?

Avoid making numerous poorly targeted applications in a short period. First identify suppliers whose products support the meter and whose underwriting can consider the evidence or security you are able to provide.

Do suppliers check the director’s personal credit?

Not in every case.

A limited company is a separate legal entity, so its energy agreement should normally be assessed and signed in the company’s name. A director does not automatically become personally liable for the company’s energy bills merely by being a director.

However, personal information can become relevant when:

• The customer is a sole trader
• The customer is an ordinary partnership
• A director offers or is asked for a personal guarantee
• The application expressly authorises a personal credit check
• The supplier carries out identity or fraud-prevention checks
• The company is newly formed and the supplier’s stated process includes connected-person information
• The bank account or payment arrangement belongs to an individual

Never describe a limited-company application as a sole-trader account merely to pass a check. The contracting party should match the entity legally occupying the property and responsible for the bills.

Ask for written confirmation before providing personal information or signing a guarantee. A personal guarantee is a separate legal commitment, not simply another credit check.

How different business structures are assessed

Limited companies

The supplier will normally check the company named on the contract. Its incorporation date, accounts, public records, payment history and expected contract exposure can all matter.

A newly incorporated company may be asked for additional evidence or security even when its directors have operated successful businesses before. A previous company’s history does not automatically become the new company’s history.

Sole traders

The individual and the business are not separate legal persons. The supplier may assess the proprietor personally as well as information associated with the trading name.

The proprietor is normally personally responsible for the energy debt.

Partnerships

Liability depends on the partnership structure and contract. Ordinary partners may be jointly responsible, whereas a limited liability partnership is a separate body corporate.

Supplier terms can also impose joint and several liability. Confirm exactly who is signing and obtain legal advice if the liability is unclear.

Subsidiaries and group companies

A strong parent company’s score does not automatically replace a weak subsidiary’s score. The supplier may require:

• A parent-company guarantee
• Consolidated accounts
• Separate checks for each contracting entity
• Cross-default or group-security terms
• One deposit for the portfolio
• Separate deposits for each legal entity

Do not put every meter in the strongest group company’s name unless that company is genuinely responsible for each supply.

Charities and non-profit organisations

The supplier may consider the organisation’s legal form, accounts, reserves, funding stability and payment record. Restricted funds are not necessarily available to pay energy bills, so a high reported fund balance may not remove the need for underwriting.

Which business energy suppliers accept bad credit?

No UK supplier publishes a promise to accept every business with adverse credit, and acceptance criteria are commercially sensitive.

Several suppliers do, however, publish terms showing that deposits, advance payments, guarantees or bonds can form part of their credit-risk process. This confirms that a failed standard check does not always result in immediate rejection.

Supplier	What its published information says	What this means for an applicant
EDF	Its small-business terms allow credit checks, a different product or payment method, and a security deposit. If the issue cannot be resolved, the contract can end.	A conditional route may be available, but approval is not guaranteed.
Octopus Energy	Its business terms make supply conditional on credit checks and permit an advance payment, security deposit, bond or acceptable guarantee if requested.	It publicly identifies several possible forms of security.
SSE Energy Solutions	Published standard terms refer to credit checks and, where requested, a security deposit, bond or guarantee. Some terms also refer to credit insurers.	A deposit or other security may support an application, subject to underwriting.
Good Energy	Its published small-business terms link payment terms to the customer’s credit rating and permit a security deposit if the rating deteriorates.	Credit can affect terms at the start and during supply.
Yü Energy	Its business credit guidance says a high-risk company may be refused or asked to provide a security deposit.	The result may be conditional acceptance or rejection.
British Gas business	Its payment guidance says late-payment information can be shared with credit reference agencies. British Gas Lite requires Direct Debit and a smart meter.	Payment history and product eligibility matter, but public information does not promise bad-credit acceptance.

Sources: EDF small-business terms, Octopus Energy business terms, SSE Energy Solutions contract terms, Good Energy small-business terms, Yü Energy credit guidance and British Gas business late-payment guidance.

These documents describe possible contractual mechanisms, not current approval thresholds. Terms can also vary by product, meter, company size and sales channel. Always obtain the current contract pack and the result for your own legal entity.

Why a definitive supplier ranking would be misleading

Two apparently similar businesses can receive different results because of:

• Different legal entities
• Different incorporation dates
• Different energy volumes
• Different sites and meter types
• A recent change in filed accounts
• Different CCJs or payment records
• One applicant offering a deposit
• One application being supported by a parent company
• Supplier capacity or risk appetite changing
• A credit insurer approving one risk but not another

A supplier described online as “good for bad credit” may still decline a particular business. Treat such descriptions as marketing, not an acceptance guarantee.

What happens after a failed credit check?

Ask whether the application has been declined or referred.

Result	Meaning	Next action
Approved	Standard underwriting has passed	Check price and contract terms
Referred	A person or insurer needs more information	Provide a focused evidence pack
Conditional approval	Supplier will contract if security or new terms are accepted	Compare the total cost and legal risk
Product changed	Original tariff or payment method is unavailable	Request the alternative terms in full
Credit limit reduced	Only part of the portfolio or a lower exposure is accepted	Consider splitting sites or fuels
Declined	Supplier will not offer the requested contract	Ask whether reconsideration is available before applying elsewhere
Contract ended after check	A condition of the provisional agreement failed	Obtain written confirmation before signing another contract

Do not assume that an online quotation means the credit check has passed. A price may be provisional until the supplier validates the customer, meter, consumption and payment method.

Equally, do not assume a rejected registration cancels every contractual obligation. Business energy agreements generally have no automatic 14-day cooling-off period. Ask the supplier to confirm in writing whether the proposed contract ever became binding and whether it has now ended.

Business energy security deposits explained

A security deposit is money held by the supplier to reduce the loss it could suffer if the customer fails to pay.

It is different from:

• A payment of an energy bill
• A credit balance created through monthly Direct Debits
• An advance payment allocated to future charges
• A non-refundable application fee
• A personal guarantee
• A bank guarantee or bond

The contract should explain how the money is held, whether interest is paid, when it can be used and when it will be returned.

How much is a business energy deposit?

There is no universal amount.

Ofgem’s voluntary guidance says some suppliers reported calculating deposits using three months of estimated consumption. It does not establish three months as a mandatory maximum or standard for every contract.

A simple indicative calculation is:

Estimated deposit = annual charges × deposit months ÷ 12

If estimated annual charges are £12,000:

Deposit period	Indicative amount
One month	£1,000
Two months	£2,000
Three months	£3,000
Six months	£6,000

If a larger site is expected to spend £72,000 per year, a three-month deposit would be £18,000.

The actual calculation may include more than forecast unit charges. Ask whether it covers:

• Standing charges
• Network and capacity charges
• Metering charges
• Pass-through costs
• VAT
• Climate Change Levy
• Several meters or sites
• A seasonal uplift
• Existing arrears

A deposit should not be confused with payment of an existing debt. If £4,000 is already overdue, a supplier might require the arrears to be paid as well as a separate deposit protecting future charges.

Why billing frequency affects the deposit

A monthly-billed customer normally accumulates less unpaid exposure than a quarterly-billed customer. Ofgem’s guide specifically identifies billing and payment terms as factors that can affect the amount.

If a requested deposit is unaffordable, ask whether it can be reduced by:

• Monthly rather than quarterly billing
• Variable Direct Debit for each monthly bill
• A shorter payment period
• Advance payment for the first month
• Accurate smart or AMR meter readings
• A lower credit limit covering fewer sites
• A parent-company or bank guarantee
• Demonstrating stronger current finances

The supplier does not have to accept the alternative, but the request gives it a specific risk-reduction proposal to assess.

What should the supplier explain?

Ofgem says a supplier following its voluntary best-practice guide would communicate:

• That it assessed the applicant and identified credit risk
• The basis for requesting the deposit
• How the amount was calculated
• When the deposit will be repaid
• Whether alternative measures are available

Request all of this in writing before paying.

Also ask:

1. Is the deposit a condition of the contract?
2. When is payment due?
3. Is it held separately or on trust?
4. Does it earn interest, and at what rate?
5. Can the supplier deduct disputed charges?
6. Can it demand a top-up later?
7. Can the amount increase if consumption rises?
8. When can the business request a reassessment?
9. What evidence is needed for an early refund?
10. Will it be set against the final bill?
11. How quickly will any balance be returned?
12. What happens if the supplier becomes insolvent?

When should a deposit be returned?

The contract controls the legal return terms.

Ofgem’s voluntary guidance recommends allowing a customer to request partial or full release following a material improvement in creditworthiness where reassessment is available. It also recommends prompt repayment of any difference after a lower assessment.

At the end of supply, the guidance recommends making clear whether the deposit will be used against final charges. If it is not offset, the remaining deposit should be returned promptly once the final bill and debts have been settled.

Published supplier terms differ. For example, EDF’s small-business terms say that, unless it is reasonable to hold the deposit longer, it will normally be returned after one year with interest. Good Energy’s published terms describe interest and repayment after supply ends and all amounts are paid.

Do not assume another supplier uses the same timetable.

Is a business deposit protected?

Do not assume that an energy deposit has the same protection as money in a bank account.

Ask how it is legally held and what the contract says about insolvency. Ofgem expects suppliers to manage deposits responsibly and maintain arrangements to return them, but Ofgem’s supplier-failure guidance for businesses says the safety net does not generally guarantee business customer credit balances.

The legal treatment of a specific security deposit may depend on whether it is held on trust and the wording of the contract. A business considering a very large deposit should obtain legal and financial advice.

Deposit versus a more expensive no-deposit tariff

The cheapest quoted unit rate is not necessarily the best commercial choice.

Consider a two-year electricity contract:

Item	Supplier A	Supplier B
Forecast annual bill	£12,000	£12,450
Security deposit	£3,000	£0
Two-year billed cost	£24,000	£24,900
Illustrative cost of tied-up cash at 10% a year	£600	£0
Indicative economic cost	£24,600	£24,900

Supplier A remains £300 lower in this simplified example, provided the £3,000 is returned in full. However, Supplier B preserves £3,000 of working capital throughout the contract.

The comparison changes if:

• The deposit earns interest
• The business’s cost of finance is higher or lower
• Supplier A holds the money for longer than two years
• Part of the deposit is used against unpaid charges
• One tariff has different standing or pass-through charges
• Consumption differs from the forecast

Record the deposit as a cash-flow requirement as well as a contractual asset. Ask an accountant how it should be recorded for the business.

Alternatives to a cash deposit

Direct Debit

An automated payment method can reduce collection risk and may be a condition of particular products.

It can also produce lower prices. British Gas business, for example, says Direct Debit discounts can be available, although treatment differs by contract and sales route.

A Direct Debit does not guarantee approval and does not prevent the supplier from requesting security.

Advance payment

The customer pays an agreed amount before the supply begins or before energy is consumed. The money may then be credited against future bills.

Clarify:

• The amount and due date
• Which charges it covers
• How it appears on invoices
• What happens if consumption is lower than forecast
• Whether it is replenished monthly
• When unused money is refunded
• Whether it is legally different from a security deposit

Personal guarantee

A director or other individual promises to pay specified company debts if the company does not.

This can help a newly incorporated company obtain terms, but it removes part of the practical protection of limited liability for the guaranteed obligation.

Before signing, check:

• The maximum guaranteed amount
• Whether liability is capped or unlimited
• Which sites, fuels and contracts it covers
• Whether interest and recovery costs are included
• When the guarantee ends
• Whether it survives a contract renewal or supplier transfer
• How the guarantor can be released
• Whether several guarantors are jointly and severally liable

Obtain independent legal advice. Do not treat a personal guarantee as routine application paperwork.

Parent-company guarantee

A financially stronger parent promises to meet a subsidiary’s obligations. This may be more appropriate than a director’s personal guarantee for a corporate group.

The supplier may inspect the parent’s accounts and require specific wording. The parent should understand the effect on its contingent liabilities and any banking covenants.

Bank guarantee or bond

A bank or approved institution promises to pay the supplier up to an agreed amount if defined conditions occur.

This avoids transferring the full deposit to the supplier but can:

• Use the business’s banking facilities
• Require collateral
• Carry arrangement and annual fees
• Contain strict claim conditions
• Take longer to organise

It is generally more practical for larger energy contracts than very small sites.

More frequent billing

Monthly billing, prompt meter data and a short payment period can reduce accumulated exposure. A supplier may still require a deposit, but Ofgem’s guidance identifies billing frequency as relevant to its size.

Prepayment or pay-as-you-go

Some suppliers and meter types can support payment before consumption. EDF’s small-business terms, for example, contain pay-as-you-go provisions for applicable smart-meter customers.

This can reduce credit exposure but may create operational risk. If the account runs out of credit, the meter may self-disconnect. A business should assess:

• Whether the meter and supplier support the arrangement
• Tariff and standing charges
• How credit is added
• Emergency and out-of-hours arrangements
• Debt recovery deductions
• Reconnection process
• The effect of an internet, app or payment failure
• Whether critical equipment could safely lose power

Prepayment may be unsuitable for refrigeration, healthcare, security, server or continuous-production loads.

How a new business can improve its application

A start-up cannot manufacture two years of trading history, but it can make the current risk easier to understand.

Prepare a concise underwriting pack containing only relevant, accurate documents.

Document or information	What it demonstrates
Certificate of incorporation	Correct entity and incorporation date
Companies House number	Allows the supplier to match public records
Lease or completion statement	Responsibility for the premises
Opening meter photographs	Correct meter and opening reading
MPAN and MPRN	Correct electricity and gas supplies
Business bank details	Ability to establish the agreed payment method
Proof of funding	Cash available to meet initial bills
Management accounts	Current performance not yet shown in filed accounts
Cash-flow forecast	Ability to meet seasonal energy costs
Business plan	Context for activity and expected growth
Expected annual consumption	Allows accurate exposure calculation
Previous site bills	Supports the consumption forecast
Parent accounts	Supports a proposed parent guarantee
Existing supplier reference	Evidence of reliable payment where available
Deposit or guarantee proposal	Gives a practical way to reduce risk

Do not send sensitive information to an unverified caller. Confirm who is requesting it, why it is needed, how it will be transmitted and how it will be used.

Forecast consumption realistically

Understating consumption to obtain a smaller deposit can cause later problems.

The supplier may:

• Reassess the security requirement
• Increase Direct Debit payments
• Demand a deposit top-up
• Apply contractual charges
• Treat inaccurate information as a breach

Use previous bills for the premises where available, adjusted for planned opening hours, equipment and production. For a new building or unit, calculate major loads and give the supplier a range rather than an unsupported low estimate.

Apply in the correct legal name

Make the legal customer consistent across:

• The quotation
• Supply contract
• Lease or title
• Companies House record
• Direct Debit mandate
• VAT information
• Change-of-tenancy evidence
• Broker’s letter of authority

A mismatch can look like a credit problem when it is actually an identity or onboarding problem.

What to do before applying with bad credit

1. Check the business credit file

Review the data held about the company before the supplier does. Different agencies can hold different information and use different scoring models.

Experian’s current business-credit guide identifies payment performance, filed accounts, CCJs and general financial health among the factors affecting its commercial score.

Look for:

• Incorrect company name or number
• Wrong registered address
• Outdated director information
• A CCJ belonging to another entity
• A satisfied judgment still shown incorrectly
• Accounts or confirmation statements not reflected
• Duplicated trade accounts
• Payments allocated to the wrong customer
• Fraudulent or unauthorised activity

Challenge inaccuracies through the organisation that supplied or records the data. Keep evidence and allow time for corrections to be processed before the energy application where possible.

2. Bring Companies House information up to date

File accounts, confirmation statements and changes on time. Companies House says this information forms an important part of commercial credit reports, and even an extension or late filing can influence how the business is perceived.

Ask the company’s accountant whether filing fuller financial information is appropriate. Greater transparency can support underwriting, but public filing and accounting choices should not be made solely for one energy quotation.

3. Resolve preventable payment issues

Before applying:

• Pay genuinely overdue undisputed bills where affordable
• Trace unallocated payments
• Correct failed Direct Debits
• Agree and maintain payment plans
• Obtain confirmation when judgments or debts are satisfied
• Dispute inaccurate charges in writing
• Keep current supplier bills up to date

Do not falsely state that a disputed or unpaid balance has been cleared.

4. Explain exceptional events briefly

A manual underwriter may need context for a one-off event such as:

• Loss of a major customer
• Flood, fire or temporary closure
• Delayed insurance payment
• A disputed invoice that became a judgment
• A historic director dispute
• A recent acquisition or restructuring

Provide dates, evidence, the resolution and the measures preventing recurrence. A long narrative without supporting figures is less useful than a one-page explanation with current accounts and payment evidence.

5. Decide what security is acceptable

Set limits before negotiations:

• Maximum cash deposit
• Whether advance payment is affordable
• Whether the company can use a bank facility
• Whether a parent guarantee is available
• Whether any director would consider a personal guarantee
• Maximum acceptable contract length
• Preferred billing frequency

This prevents the business from accepting a serious legal or cash-flow commitment during a hurried sales call.

CCJs, insolvency and connected companies

County Court Judgments

A CCJ can materially affect underwriting, particularly if it is recent, large or unsatisfied.

Prepare:

• The judgment date and amount
• Whether it has been paid
• Evidence of satisfaction
• The underlying circumstances
• Current management accounts
• A proposed deposit or guarantee

The supplier may still decline. Never promise that paying a CCJ will immediately produce approval; credit files and supplier systems may take time to update, and other risk factors can remain.

Company voluntary arrangements and administration

A company in a CVA, administration or another formal process may need specialist advice before entering a long-term energy contract or granting security.

The supplier might request:

• Insolvency-practitioner consent
• Payment in advance
• A deposit
• A guarantee for post-insolvency charges
• Short payment periods
• Evidence that ongoing energy costs are funded

The legal effect depends on the procedure and contract. The company and office-holder should obtain appropriate legal advice.

New companies following a business failure

A new legal entity that acquires assets from a failed company does not automatically inherit the old company’s credit history or energy debt. It also does not inherit a good payment record simply because the same directors or premises are involved.

Suppliers may examine:

• Common directors or owners
• Similar trading names
• The same premises and equipment
• The date responsibility changed
• Whether the transaction was an asset or share purchase
• Evidence from an administrator or solicitor
• Whether the old and new businesses are genuinely separate

Provide accurate change-of-tenancy documents. Do not use a new company to misrepresent who consumed the energy or avoid a debt owed by the same legal entity.

Previous occupier debt

A genuinely separate incoming business should not be charged for energy used by the previous occupier.

However, the incumbent supplier may initially associate the address with the old account. Submit:

• The new legal name and company number
• Signed lease or completion evidence
• Date responsibility began
• Opening meter reading and photograph
• Meter serial number
• MPAN or MPRN
• Landlord or solicitor confirmation if necessary

The supplier needs to complete the change of tenancy before it can assess and bill the correct customer. Our guide to setting up energy when moving business premises explains the full process.

If the old and new entities are connected, expect closer scrutiny. Similar names or directors do not automatically create liability, but the supplier may need stronger evidence.

Existing energy debt and switching

There are two separate credit problems:

1. The existing supplier may object to the transfer because of overdue debt where the contract permits it.
2. The proposed supplier may decline or condition the new application after its own credit assessment.

Paying a deposit to the new supplier does not clear money owed to the old supplier. Equally, settling the old account does not guarantee that the new supplier will accept the application.

Ask both suppliers for the precise status. Our article on a blocked business energy switch explains debt objections, contract objections and registration failures.

If a balance is wrong, reconcile the invoices, readings and payments rather than repeatedly applying elsewhere. See our guides to business energy bills and business energy back-billing.

Can a broker help with bad credit?

A competent broker may know which suppliers can consider a start-up, manual referral, deposit or guarantee. It can also package the application once and approach an appropriate panel.

However, a broker cannot guarantee acceptance or override a supplier’s underwriter or credit insurer.

Ask the broker:

• Which suppliers it will approach
• Whether it has disclosed the adverse credit issue accurately
• Whether formal searches will be made
• How many applications will be submitted
• Which security options each supplier accepts
• Whether the quotation is conditional on credit approval
• What commission or fee is included
• Whether commission is still payable if the supply never starts
• What authority the letter of authority grants
• Whether it can provide every rejection or referral reason

Do not pay a large upfront “credit repair” or “guaranteed acceptance” fee without verifying the provider, written service and refund terms.

A letter of authority should be no wider than necessary. It does not automatically authorise a broker to sign an energy contract or personal guarantee.

How to compare conditional energy offers

Use a table that separates tariff cost, cash security and legal liability.

Comparison item	Offer 1	Offer 2	Offer 3
Electricity unit rate
Gas unit rate
Standing charge
Forecast annual bill
Contract length
Deposit required
Advance payment
Deposit interest
Review date
Refund trigger
Payment method
Billing frequency
Guarantee required
Guarantee cap
Broker commission
Pass-through charges
Early termination terms

Calculate at least:

1. Forecast billed cost over the full term.
2. Upfront cash required before supply starts.
3. Indicative financing or opportunity cost of the deposit.
4. Maximum personal or group liability under a guarantee.
5. Cost if consumption is higher or lower than forecast.

A tariff that is 0.5p/kWh cheaper saves £250 a year at 50,000 kWh. That saving may not justify an unnecessarily large guarantee or unaffordable deposit.

Business energy with no credit check

Businesses often search for a “no credit check business energy supplier”, but the phrase can be misleading.

A supplier might avoid a particular external credit search yet still assess risk using:

• Public Companies House records
• Internal payment history
• An insurer or underwriter
• Advance payment
• Prepayment
• A deposit
• Identity and fraud checks
• Contract eligibility rules

A deemed contract may begin without the occupier applying for a negotiated tariff, but it is not a cheap no-credit-check product. The rates may be high, the supplier can still seek payment and continued non-payment can lead to debt recovery or disconnection action.

Ask what the provider means by “no credit check” and obtain all prices and security conditions in writing.

Multi-site businesses with weak credit

For a portfolio, the supplier’s exposure can be much larger than the sum of individual monthly bills because several sites accrue charges at once.

Possible outcomes include:

• One group deposit
• A deposit for every legal entity
• A parent-company guarantee
• Approval of low-usage sites only
• Separate underwriting for electricity and gas
• Different suppliers for different sites
• Monthly portfolio billing
• A lower approved credit limit

Do not let one rejected site obscure the status of the others. Maintain a meter schedule showing each legal customer, MPAN or MPRN, expected annual cost, current supplier and application result.

Our guide to multi-site business energy contracts explains portfolio pricing and consolidated billing.

Landlords, tenants and serviced premises

First establish who buys the energy.

If the landlord holds the main supplier contract and recharges tenants, the tenant may not need its own energy agreement. Its rights and charges will instead depend on the lease, service charge and resale arrangement.

If the tenant has its own registered MPAN or MPRN and pays the licensed supplier directly, the tenant’s legal entity will normally be assessed.

Do not place the account in a landlord’s, director’s or connected company’s name merely because the true occupier has poor credit. Incorrect responsibility details can cause tax, billing, debt and change-of-tenancy disputes.

Step-by-step application process

1. Identify the legal customer

Confirm the exact company, sole trader, partnership, charity or public body responsible for the premises.

2. Verify the supply

Record the address, meter serial number, MPAN or MPRN, current supplier, meter type and annual consumption.

3. Review the credit position

Find the actual issue: no accounts, low score, low limit, late payments, CCJ, insolvency or incorrect data.

4. Correct factual errors

Update Companies House and challenge incorrect credit or supplier records.

5. Prepare supporting evidence

Gather current accounts, bank or funding evidence, occupancy documents and an accurate consumption forecast.

6. Choose acceptable security

Decide whether the business can offer a deposit, advance payment, Direct Debit, guarantee or other arrangement.

7. Request suitable quotations

Tell the supplier or broker that underwriting may be required before relying on the advertised price.

8. Limit formal applications

Ask which searches will be performed and avoid unnecessary repeated submissions.

9. Obtain the decision in writing

Confirm whether it is approved, referred, conditional or declined.

10. Compare complete terms

Include tariff charges, deposit, interest, refund terms, payment method, broker commission and guarantee liability.

11. Read before agreeing

Business contracts normally have no automatic cooling-off period. Do not sign first and investigate the guarantee later.

12. Monitor the switch

Confirm the new supplier has registered the correct supply and submit an opening meter reading.

Questions to ask the supplier

1. What caused the credit referral or rejection?
2. Was the issue the score, credit limit or expected contract value?
3. Which entity and agency were checked?
4. Will the search be visible to others?
5. Can the application be manually reviewed?
6. What additional evidence would change the decision?
7. Is a deposit available instead of rejection?
8. How was the deposit calculated?
9. Can monthly billing reduce it?
10. Is advance payment an alternative?
11. Is a parent-company guarantee acceptable?
12. Is a personal guarantee required?
13. What is the maximum guarantee liability?
14. When can the deposit be reviewed?
15. What interest is paid?
16. When and how is it returned?
17. Is the tariff price conditional on Direct Debit?
18. Can the supplier reassess credit during the contract?
19. Can it demand additional security later?
20. What happens if the credit insurer withdraws cover?
21. When does the contract become binding?
22. What happens if the application ultimately fails?

Email template requesting a manual review

Subject: Request for review of business energy credit decision

Legal customer: [full legal name]
Company number: [number]
Supply address: [address]
MPAN/MPRN: [supply number]
Quotation or application reference: [reference]

We have been informed that the application has been referred or declined following a credit assessment. Please confirm:

1. Whether the result is a referral, conditional approval or final rejection
2. Whether the concern relates to our score, recommended credit limit, trading history, expected contract value or another factor
3. Whether a manual review is available
4. Which supporting information you require
5. Whether you would consider a security deposit, advance payment, Direct Debit, guarantee or alternative billing terms
6. Whether a formal credit search has been recorded
7. Whether the proposed supply contract is currently binding

We can provide [management accounts/proof of funding/payment history/parent-company information] and are willing to discuss [proposed security].

Please provide any revised offer, security calculation and repayment terms in writing before we decide whether to proceed.

Do not attach bank statements, identification or guarantees until the supplier confirms a secure submission method.

Email template challenging a deposit calculation

Subject: Request for business energy deposit calculation

Account or application reference: [reference]
Legal customer: [full legal name]
Supply address: [address]

Please provide the following information concerning the requested security deposit of £[amount]:

1. The credit-risk basis for the request
2. The forecast consumption and charges used
3. The number of billing months represented
4. Whether VAT, CCL, standing charges or other costs are included
5. How and where the deposit will be held
6. The interest rate, if any
7. The reassessment date and evidence required
8. The circumstances in which deductions may be made
9. The final-bill and refund process
10. Any alternatives that would reduce or replace the deposit

We would also like you to consider whether monthly billing by Direct Debit and [supporting evidence or guarantee] would permit a lower deposit.

Please confirm the position in writing before the payment deadline.

If the supplier’s decision seems unfair

A supplier is generally allowed to make a commercial decision about whether it will offer a particular product or extend credit.

The Energy Ombudsman’s small-business guidance specifically says it cannot consider commercial decisions about whether a company will provide a product or service.

That is different from a complaint about:

• Incorrect account information
• A failure to follow agreed contract terms
• Misleading sales statements
• An unexplained or wrongly retained deposit
• Failure to return money when contractually due
• Incorrect billing or debt allocation
• A broker’s conduct
• Poor handling of a change of tenancy

Raise the complaint with the supplier first. Eligible microbusinesses and small businesses may approach the Energy Ombudsman after a deadlock letter or after the supplier has had eight weeks to consider the complaint.

Current small-business eligibility includes a business with fewer than 50 full-time-equivalent employees and turnover of no more than £6.5 million or a balance-sheet total no higher than £5 million. A business can also qualify through annual consumption of no more than 200,000 kWh of electricity or 500,000 kWh of gas.

If the problem is inaccurate credit-reference data, challenge it with the agency and the organisation that supplied the information. A complaint about a personal guarantee or complex insolvency issue may require independent legal advice.

Common mistakes

Applying to every supplier at once

This can create unnecessary searches and inconsistent applications without addressing the underlying concern.

Confusing no history with bad credit

A start-up should lead with current funding and forecasts, not assume it must accept any price offered.

Using the wrong company

Putting the contract in a connected company’s name can create liability and change-of-tenancy problems.

Hiding a CCJ or insolvency event

Public and credit records may reveal it. An accurate explanation is more credible than inconsistent information.

Comparing only unit rates

Include the standing charge, pass-through costs, deposit, interest, guarantee and broker commission.

Treating a guarantee as a formality

It can create substantial personal or parent-company liability beyond the cash deposit that was avoided.

Assuming the deposit is three months

Three months is a method reported by some suppliers to Ofgem, not a universal statutory rule.

Assuming a deposit is automatically protected

Check how it is held and the insolvency wording. Business credit balances do not receive a general Ofgem safety-net guarantee.

Understating expected usage

The supplier may reassess payments or security when actual consumption becomes clear.

Remaining on deemed rates indefinitely

Deemed supply can keep a live site operating, but it is not a substitute for resolving the credit issue and comparing negotiated options.

Paying an unverified broker upfront

No broker can guarantee that an independent supplier or credit insurer will approve the application.

Frequently asked questions

Final verdict

Bad credit or no trading history can make business energy procurement harder, but it does not always make a contract impossible.

The strongest application does four things:

1. Names the correct legal customer.
2. Explains the actual credit issue accurately.
3. Provides current evidence proportionate to the supplier’s risk.
4. Offers a workable form of security without accepting unnecessary liability.

Compare the complete commercial effect of each proposal. A refundable £3,000 deposit, a £3,000 advance payment and an unlimited personal guarantee are not equivalent, even if they accompany the same unit rate.

For a new company, proof of funding, realistic consumption and monthly Direct Debit may be enough to secure a manual review. For an established company with adverse records, correcting errors, settling undisputed debt and proposing a deposit or guarantee can improve the available options. None of these steps guarantees acceptance because every supplier retains its own underwriting policy.

Before agreeing, obtain the credit conditions, deposit calculation, refund rules, payment terms and guarantee wording in writing. Then compare business energy prices using the tariff cost, upfront cash requirement and legal exposure—not the headline pence-per-kWh rate alone.

Information and official guidance last reviewed on 13 August 2026. Supplier credit policies, products and contract terms can change, and every application is assessed individually.