Getting business finance with a CCJ
Many new and small businesses can run into financial troubles due to unforeseen circumstances. In cases where payments are defaulted on loans or businesses can’t make certain other repayments, they may be issued with a County Court Judgement (CCJ).
While some business CCJs are quite serious, others can be resolved simply and needn’t have a major negative impact on your reputation as a director. Many finance providers now have options for business finance for those who have been issued with a CCJ. However, as expected, it is usually more difficult to obtain funds in this instance. There are things you can do to improve your image to lenders.
What is a CCJ?
A County Court Judgement is an order set by the court against your business if you have unresolved debts with a supplier, contractor or creditor. The CCJ will usually be issued after a series of warnings and is often a last resort for companies who are owed money.
A CCJ will be issued to you if the court have reviewed the case and make a formal decision that you must pay the funds back. Within the order you’ll be told how you need to pay the funds back, whether that be instalments or a lump sum, as well as a deadline for the amount to be paid.
Anyone can fall into debt and therefore get a CCJ, and it most cases it can be resolved. However, more serious cases can signal a suffering business.
How long does a CCJ stay on your credit file?
A CCJ can stay on your credit file for up to six years but can be wiped if you pay the amount off in within a month of receiving the notice. It’s therefore a good idea to try and resolve the judgement as soon as possible. This will reduce the likelihood of future financial issues or markers on your credit file.
How do I find out if I have a CCJ?
There are some instances where you might not be aware that you’ve had a CCJ. Sometimes this can happen for reasons that can easily be avoided, like a creditor or business you owe money to not having the right contact details for you. If they’re unable to contact you, they may feel this is the only way they’ll be able to retrieve what they’re owed.
Certain administrative errors can also lead to a mistaken CCJ showing on your credit file. In rare cases, CCJs can be issued to the wrong business if you have a very similar name. If you’re applying for credit soon after resolving a CCJ, it’s possible that your credit file may still show that you have one unresolved. This could, therefore, harm the chances of you obtaining funding until it has been changed to resolved.
You can check whether you have a CCJ by looking on the Register of Judgements. The search costs between £4 and £10 but if you think you may have a CCJ and want to check before applying for credit, it’s worth paying this small fee. If you find the information on the register is wrong, contact Trust Online by calling 020 7380 0133 and they can check your details with the court.
How to clear a CCJ
The most obvious answer to this is to pay the judgement, as then the CCJ will be resolved. However, in some cases you may feel you’ve been wrongly accused of owing money and will therefore want to contest the decision. In this case you would need to go to court and explain your reasons for not owing the money.
It’s important to be honest about whether you do or don’t owe the money when it comes to CCJs. Lying could have worse effects in the long run. If you’re worried or feel you need professional advice, contact a lawyer for assistance. There is also much more information about CCJs on the government website.
Loans for people with CCJs and defaults
It’s no surprise that having a CCJ on your business’s credit file will most likely have a negative impact when it comes to applying for finance. When deciding on whether you’re trustworthy and likely to repay, creditors will check your credit file for markers that flag as a warning. They’ll also be able to see the amount owed on the county court judgement. However, don’t panic; having a CCJ doesn’t automatically mean you’ll be rejected for every finance application. There are options available which we can help you to find.
Getting an unsecured business loan with a CCJ
While unsecured loans can be difficult to attain, there are some instances where lenders can review your case and make a more informed decision. For example, if you have an historic CCJ from a few years ago which was resolved smoothly when your business had a tricky patch, but you’re now applying for a short loan and your business is thriving, lenders may see this as a sound investment and take on your application.
Getting a secured loan with a CCJ
Secured lending is usually a much better route to take if you’ve had financial difficulties in the past. Secured loans use a company’s assets such as property, equipment and machinery as security for the loan should any payments default. This gives lenders more peace of mind and will likely help your case for securing funds as there is less of a risk.
For further information about getting a business loan when you have a CCJ, contact our team today on 01371 870 815. We’ll be able to advise you on which routes are the best to take and help get you in touch with lenders.