Company Number: 13246680

Analysis Date: 2025-07-20 17:37 UTC

1. Credit Opinion: CONDITIONAL APPROVAL ABA Creators Ltd is a relatively young private limited company incorporated in 2021, engaged in management consultancy activities. The company’s recent accounts show a sharp decline in net assets from £9,935 in 2023 to just £2 in 2024, indicating a significant erosion of equity. The reduction in net current assets and the large directors' loan account (over £50k) suggest reliance on related party funding rather than independent cash generation. While not currently in liquidation or administration, the balance sheet weakness and reliance on director loans pose credit risk. Approval is conditional on obtaining further clarity on the nature and terms of director loans and assurances on sustainable cash flow generation going forward.

2. Financial Strength:

• Net assets have declined dramatically from £9,935 (2023) to £2 (2024).
• Current assets decreased from £87,238 (2023) to £54,052 (2024), driven mainly by a drop in debtors from £79,393 to £47,959.
• Current liabilities are low (£3,107 in 2024), but the company has significant long-term liabilities in the form of director loans (£50,943 in 2024).
• Share capital is nominal (£2), reflecting a micro/small scale business.
• The financial profile indicates a weak equity base and high dependence on director loans, which are not secured debt.

3. Cash Flow Assessment:

• Cash on hand is modest and declining (£7,845 in 2023 to £6,093 in 2024).
• Debtors remain substantial, but their reduction year-on-year may reflect lower sales or tighter credit control.
• Working capital remains positive but has fallen sharply (£87,181 in 2023 to £50,945 in 2024).
• The presence of director loans as a significant liability suggests external borrowing is limited, with funding primarily from insiders.
• The company's ability to generate operating cash flow to meet obligations is uncertain and should be monitored.

4. Monitoring Points:

• Track ongoing debtor collections and any changes in debtor days.
• Monitor movement and terms of director loan accounts, including repayment plans.
• Review future cash flow projections and turnover trends to assess sustainability.
• Watch for any increase in current liabilities or overdue payments.
• Management changes or governance issues, given the concentration of control among directors.