Financial Requirements to Apply for an O-Licence
The requirements for a standard national and international licence (not restricted) demand that the applicant has sufficient funds to start up and run the business properly. As well as assets such as vehicles and premises, there must be enough working capital (such as cash, loan facilities or other assets which can quickly be turned into cash) to cover all the expenses which are likely to arise before any money is earned to meet them.
Applicants for standard national and international licences (not restricted) must show that they have available reserves of £8,000 for the first vehicle and £4,450 for each subsequent vehicle authorised. The word “authorised” is important. Operators must have these reserves for both vehicles in their possession and those on the margin.
Restricted Licences must meet the same criteria to support a restricted licence or application – £3,100 for the first vehicle and £1,700 for each additional authorised vehicle.
Your available loans, credit cards and overdraft facilities also count towards these amounts, so it’s not only cash on your account. Money and credit available to your partners also count for limited companies and partnerships.
When you apply, these amounts must have been available to you during a 28-day period, the last date of which must not be more than 2 months from the date of receipt of the application.
This is how much you need to have for the number of vehicles you are applying for:
- 1 vehicle = £8,000
- 2 vehicles = £12,450
- 3 vehicles = £16,900
- 4 vehicles = £21,350
- 5 vehicles = £25,800
- 10 vehicles = £48,050
- 20 vehicles = £92,550
The rates are calculated each year against the Euro exchange rate as required under EU Regulation 1071/2009. The level has increased this year due to the drop in the value of the pound.
The Senior Traffic Commissioner’s Statutory Guidance Document No. 2 relating to “Finance” indicates that, where a standard licence holder cannot demonstrate appropriate financial standing, the Traffic Commissioner may (but is not required to) provide a period of time (i.e. a period of grace) for the licence holder to rectify the situation. The licence holder may ask the Traffic Commissioner for up to 6 months to demonstrate that the requirement to be of the appropriate financial standing will be met on a permanent basis.