Be prepared to prove you have financial standing
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The biggest hurdle facing any new applicant for on 0-licence is that of proving he is of "appropriate financial standing". This is only logical: an operator who does not have sufficient capital may be inclined to overload or to break the hours rules or to skimp on maintenance.
The regulations require every 0-licence applicant to show that he has capital and reserves of at least 3,000Ecu (£2,500) per vehicle.That doesn't mean that an applicant will get a licence by going to the TC with £2,500 in an envelope. "Available capital and reserves" means money which is available after the vehicle is on the road and all the start-up expenses have been paid.
So what should a licence applicant provide? In a recent case before the Deputy TC in the North East Traffic Area an objection was lodged by the Road Haulage Association. The applicant had applied for a standard international licence for four vehicles and submitted a bank statement in his own name showing a deposit of £10,000. No other evidence was submitted.
The Deputy TC refused to grant the licence. In giving judgment he said the applicant had to show that he had put the vehicles on the road, paid for the necessary VED and insurance, paid the drivers wages—and still had £2,500 per vehicle. In a useful judgement involving an application by 11 Adam the Transport Tribunal advised applicants to set out their available capital and reserves in a simple statement on one sheet of paper. In setting out the available capital and reserves, the Tribunal commented that licence applicants should exclude fixed capital amounts such as their vehicles.
It should include cask in the bank, stocks and debtors, representing funds which are available to the enterprise.
The statement can include loan capital. If you have negotiated a bank overdraft, that also counts as available capital and reserves; so does a contract to factor your debts which makes a capital sum available immediately.
However, goodwill is not an asset which will persuade a TC to grant a licence. An applicant might well appear before a TC and says: "I have a lucrative contract which will give me money in the future; _give me a licence." But the answer will be a firm "No".