Business Tariffs Explained

Business energy tariffs are tailored to meet your company’s day to day needs rather than being placed on any standard tariff.

Having this much accuracy is beneficial for any company manager, but it can still prove challenging to ascertain how much your gas and electricity tariff is costing you each year.

What business electricity and gas tariffs are available?

How does your business’ credit rating affect your energy rates?

The credit score and history of your company will also play a part in which business energy suppliers choose to provide you with gas and electricity. Suppliers will be conscious about the associated risks when taking on a new customer as business energy is expensive and will be purchased in large quantities. The last thing a provider wants to do is take on a commercial customer that is not able to keep up with their tariff payments.

If you operate in a high-risk industry or your company has a lower credit rating, your choice of supplier and business tariff may be limited. It is clear why some energy companies will not accept a business that has a poor credit history or a poor credit score, as they will not want to take on this added level of risk, it’s far easier for them to restrict their options. Some suppliers, as a result of the above, may not grant a business access to their lowest rates either.

Suppliers that do accept a business with a lower credit rating may do the following to offset the risk involved:

  • Charge a higher premium
  • Ask for a security deposit in advance
  • Insist that your business pays via direct debit
  • Install a prepayment meter on your premises

Find out more about prepayment and smart meters for business in our guide on the subject.

With this in mind, it shouldn’t come as a surprise that energy suppliers offer their best tariffs to those commercial customers that have an excellent credit history and rating. The supplier will conduct a credit check when you apply for a business energy tariff to find out your credit score. Analysts in the industry estimate that 33% of businesses are not able to access the cheapest rates because they do not meet the minimum credit score threshold. Established companies that have their finances in order will be able to access the best business tariffs on the market.

Start-up businesses generally have a lower score as they have not been around long enough to build a good credit history. If you’re company is relatively new or you haven’t been able to keep on top of your finances, an energy supplier may be reluctant to offer you the cheapest business energy tariff. If you’re a new start up, it can also pay off to better understand your business energy bills.

What happens when your business energy tariff comes to an end?