BH LONDON I LIMITED

Executive Summary

BH London I Limited is a newly established real estate company with significant investment property but currently negative working capital and equity due to high secured borrowings. While the asset base is strong, liquidity challenges pose risks to short-term debt servicing. Conditional credit approval is recommended, subject to close monitoring of cash flow and loan covenant compliance.

BH LONDON I LIMITED - Analysis Report

Company Number: 13885734

Analysis Date: 2025-07-29 14:53 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   BH London I Limited is a recently incorporated private company focused on real estate letting, holding a significant investment property valued at approximately £2 million. However, the company currently shows substantial net current liabilities (£2.1 million) and negative shareholders' funds (£121k), primarily due to a large bank loan secured against the investment property. The company’s ability to meet short-term obligations is weak given its negative working capital, but the secured nature of the debt against tangible assets and the director’s assertion of going concern mitigate some risk. Credit approval would be conditional on ongoing monitoring of cash flow and loan servicing, and potentially personal or additional security from the controlling shareholder.

2. Financial Strength:

• Fixed assets (investment property) at £1.99 million provide a strong asset base.
• Current assets (£77.7k) are minimal compared to current liabilities (£2.2 million), resulting in a working capital deficit of over £2 million.
• The company’s equity is negative, reflecting accumulated losses of £121k since formation.
• The £1.25 million bank loan secured on the investment property represents the main liability; other creditors amount to £946k.
• Overall, the balance sheet shows a leveraged position with heavy reliance on property value and secured debt.

3. Cash Flow Assessment:

• Cash on hand is low (£10.4k), and debtors (£67k) are modest but may be subject to collection risk.
• The company's current liabilities far exceed current assets indicating liquidity pressure.
• The director’s note on material uncertainties regarding going concern suggests cash flow may be tight.
• No profit and loss account is included, but the reported loss for the year (£120k) and negative reserves confirm operating losses.
• The company’s ability to service debt will depend on rental income and refinancing capacity of the secured loan.

4. Monitoring Points:

• Monitor timely receipt of rental income and debtor aging to assess cash flow stability.
• Watch covenant compliance and repayment schedule on the secured bank loan.
• Review future financial statements for improvement in working capital and profitability.
• Assess any changes in property valuation that could affect loan security.
• Keep track of director and shareholder support or capital injections if liquidity worsens.