Why is securing an energy contract for a Property Managing Agent so complicated?
Electricity and gas contracts are subject to credit check, as suppliers do not want to take on customers with a bad credit history for obvious reasons. Due to the nature of their business operations, it is common for a Property Managing Agent to:
- Have poor credit scores, resulting from the primary business function of a managing agent receiving funds from tenants and paying out funds to suppliers for work or services rendered.
- Not have any income generating activities and may even be classed as “Dormant” by Companies House.
- Prohibit payment by Direct Debit.
- Pay bills late as they wait for tenants to pay them before they can clear an invoice
These characteristics make perfect sense for the day to day operations of a Property Managing Agent, but cause problems when energy suppliers need to credit check a potential customer prior to agreeing a gas or electricity contract.
Poor credit score, dormant status, inability to pay by Direct Debit all limit the number of contracts suppliers are willing to provide a customer.
When it comes to Property Managing Agents, it is not uncommon for energy suppliers to:
- Decline to quote.
- Reject contracts due to a customer’s poor credit score.
- Insist on a large security deposit or Parent Company Guarantee.
At Direct Power we have multiple Property Managing Agent clients whom we have serviced for close to 20 years. Each year we gain additional clients as they reach out to us for assistance overcoming the problems listed above.
If you are a Property Managing Agent and want to explore an alternate approach to energy contract procurement get in touch today. We will work with you to try and find a contract solution that fits you and your tenant’s needs, help ensure VAT relief is applied where appropriate, set up online consumption and billing where possible, and avoid security deposits or guarantees where possible. For example, at the time of publication we helped a new Property Managing Agent customer with a strange case: Their former broker presented them with a single contract option from their current supplier, and it had a hefty security deposit requirement. After reviewing the case we presented multiple contract options to the client, cheaper prices, and they were not required to pay a security deposit, so everyone was happy!
Calling all Property Managing Agents… if you are fed up with your current energy contract set up, get in touch for professional and efficient energy contract advice today!