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Information Card No 1

Meeting the requirement of Financial Standing.


Financial standing is one of the 4 essential elements of an operators licence. The Traffic Commissioner will expect that your business can meet this requirement at the time of application and it all of the times until the licence comes to an end. Unfortunately, for many operators it is too easily forgotten until, the Traffic Commissioner has called you to Public Inquiry. We hope that this article below will explain why it is necessary and how it can be achieved.

When the current form of operators licensing was introduced, the Law needed a way to limit the number of operator licence discs that an operator could hold at any one time. The Traffic Commissioners also needed to be sure that road safety would not be compromised because an operator could not afford to replace tyres or brakes before they became worn out. Financial Standing achieved both of these aims by requiring that operators meet this requirement at all times.

What do I need to have to prove Financial Standing?

There have been many attempts over the years to introduce complex schemes which might meet  help an operator to meet this requirement. However, nothing speaks louder than cold hard cash in the bank.

The Traffic Commissioner will expect to see that the holder of an operators licence, also holds a bank account in the same name containing the required amount of money. This is often most simply achieved by having a deposit account containing the required level of financial standing. However, demands on capital within the business often fluctuate and to allow your business the opportunity to use some of those funds and replenish them the Traffic Commissioner will calculate your average balance over a 90 day period. This is why the Traffic Commissioner will always ask you to provide bank statements covering a 3 month period.

Can an Overdraft help?

Overdraft facilities, formally arranged with your bank can be considered as part of your financial standing evidence. Some operators arrange for the overdraft facility, to the required amount of financial standing and then remain with a positive balance at all times. However, care needs to be taken to ensure that the facility is not used to its limit on a regular basis. An undrawn overdraft facility is probably one of the cheaper ways of meeting the requirement of financial standing.

What about credit cards?

Traffic Commissioners can also take into account any credit cards in the name of your operators licence. However, there have been a number of recent cases where Traffic Commissioners have refused to accept applications for an O licence where the only evidence of financial standing is on the basis of credit card facilities.

You will be expected to provide paper evidence in the form of statements confirming the credit limit on the card and the balance over a 3 month period. The Traffic Commissioner will also take note of the interest rate on the card. Traffic Commissioners are unlikely to consider finance available if the cost of taking that finance is prohibitively high.

What should I do if I am worried about financial standing?

Financial standing can be a worry for many operators and knowing how you are doing on this score can provide great peace of mind.

We are happy to carry out a Free Financial Standing assessment to help you to understand this important aspect of operator licensing. If you are unable to meet this requirement then we can advise you on the steps that you might take to improve your position and protect your Operators licence for the future.


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