A holding company is a company whose main role is to own shares in other companies, known as its subsidiaries, rather than to trade in its own right. The trading usually happens in the subsidiaries below it.
Why businesses use them
Groups use holding structures to separate different activities, manage risk and organise ownership cleanly. The holding company sits at the top and the operating companies do the day-to-day work.
Why a lender looks at structure
When a company applies for finance, the lender wants to understand which entity is borrowing and how it fits within any group. The trading position of the operating company often matters most.
- A holding company owns, a trading company trades.
- Group structure affects who is responsible for a loan.
- It is sensible to be clear about which entity is applying.
Credicorp lends to UK limited companies and LLPs. If your business is part of a group, let us know the structure so we can assess the right entity.
See also: Can I borrow from another company in the group?, What is a judgment debt? and How much trading history do you look at?.