Company Number: 12531310

Analysis Date: 2025-07-29 18:13 UTC

1. Risk Rating: MEDIUM
   Bella Mode Limited exhibits a modest net asset position and positive working capital, indicating some capacity to meet short-term obligations. However, the extremely low cash balance combined with significant director loan receivables and current liabilities concentrated in bank loans and corporation tax suggest potential liquidity pressures.

2. Key Concerns:

• Liquidity Risk: Cash on hand is minimal (£1), while current liabilities (£12,196) include substantial bank loan and tax obligations, implying a reliance on receivables and possibly director funding to manage short-term cash flow.
• Concentration of Debtors: The entire debtor balance (£13,739) consists of a director’s loan account, which may not be readily realizable as cash and raises questions about operational cash inflows.
• Small Equity Base: Share capital remains nominal (£1) and net assets have only recently increased to £1,544 from £18 in the prior year, reflecting very limited financial buffer against adverse events.

3. Positive Indicators:

• Compliance: The company is active and up to date with its statutory filings, including accounts and confirmation statements, with no overdue submissions.
• Profit Retention: The company has increased its profit and loss reserve from £17 to £1,543, indicating some accumulation of retained earnings supporting net asset growth.
• Operational Stability: The company has maintained a consistent employee base (5 staff) and continues trading in a defined niche sector (hairdressing and beauty treatment).

4. Due Diligence Notes:

• Investigate the nature and collectability of the director’s loan account, including whether it is a true receivable or a mechanism for funding operational deficits.
• Review the company’s cash flow statements and bank facilities to assess actual liquidity management and ability to service current liabilities, especially bank loans and tax obligations.
• Confirm any contingent liabilities or off-balance sheet commitments not reflected in the accounts.
• Evaluate the director’s financial standing and willingness to continue supporting the business given the reliance on director advances.
• Assess the business model’s profitability and sustainability in light of limited equity and minimal cash reserves.