Company Number: OC444159

Analysis Date: 2025-07-20 11:15 UTC

1. Credit Opinion: APPROVE with conditions
   Aderfia LLP demonstrates a solid asset base primarily composed of investment property valued at £3.05 million, providing significant collateral. Despite its recent incorporation in 2022, the company has maintained stable net assets near £3 million. However, the working capital position is tight with current liabilities exceeding current assets, and limited turnover or profit data is available due to exemption from audit and lack of P&L disclosure. Approval is recommended subject to ongoing monitoring of cash flow and serviceability of debt, especially the £77.8k bank loan due after one year.

2. Financial Strength:
   The LLP’s financial strength is anchored by its fixed asset investment property valued consistently at £3.05 million across the last three reported years. Net assets stand at approximately £3 million, indicating strong equity backing by members. Current assets are minimal (£20.7k) and have decreased from the previous year. Current liabilities are low but exceed current assets, resulting in a net current liability position of about £57k (£77.8k long-term loan less £20.7k current assets). The company carries some member loans as well (£27k within one year). The balance sheet reflects a capital-intensive, asset-backed business with limited liquid assets.

3. Cash Flow Assessment:
   Cash on hand declined significantly from £37k to £16k in the most recent year, and trade debtors halved from £9.7k to £4.5k, indicating a reduction in short-term liquidity and cash inflows. Current liabilities are low but exceed current assets, limiting working capital flexibility. The LLP’s exemption from filing a profit and loss account restricts insight into operational cash flow generation. The company needs to demonstrate consistent cash inflows or alternative liquidity sources to service the modest bank loan and other debts.

4. Monitoring Points:

• Liquidity trends: Monitor cash balances and debtor collections closely to ensure adequate short-term liquidity.
• Debt servicing: Confirm regular servicing of the £77.8k bank loan and member loans.
• Operational performance: Request interim management accounts or bank statements to assess trading cash flows due to lack of filed P&L data.
• Asset valuations: Track investment property market movements as these underpin the LLP’s asset base and creditworthiness.
• Director/member conduct and governance: Both designated members are experienced and resident locally, no adverse records found, but ongoing governance oversight recommended.