Company Number: OC437540

Analysis Date: 2025-07-29 20:05 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Bromwich Hardy LLP is an active Limited Liability Partnership operating in commercial property advice. The firm shows a stable asset base with significant fixed assets including goodwill (£400k) and tangible assets (£128k). However, the LLP has experienced a deterioration in liquidity, moving from a modest net current asset position in 2021 to a net current liability of £134,850 as of March 2024. This indicates potential short-term cash flow stress. The members’ loans have increased, reflecting reliance on internal financing which may limit external credit capacity. Given the solid asset base but weakening working capital, credit approval should be conditional on close monitoring of cash flow and debtor collections, possibly with limits on additional short-term borrowing.

2. Financial Strength:
   The LLP’s total assets less current liabilities declined from £689,977 in 2021 to £393,171 in 2024, primarily due to a reduction in current assets and increased current liabilities. Goodwill remains a significant intangible asset at £400,000 and is not amortised, which inflates asset figures but may not support liquidity. Tangible fixed assets have increased moderately, showing ongoing investment. The net current liabilities position (£-134,850) signals a working capital deficit, which is a concern for meeting short-term obligations. The increase in loans and debts due to members (£314k) suggests dependence on member funding rather than external credit lines.

3. Cash Flow Assessment:
   Cash at bank has halved from £413,371 in 2021 to £91,134 in 2024, contributing to reduced liquidity. Debtors have decreased but remain substantial (£90,968), which places emphasis on effective collection policies to improve cash inflows. Current liabilities remain high (£317k), including trade creditors, taxation, and hire purchase contracts, all requiring timely payment. Negative net current assets and shrinking cash reserves highlight potential liquidity risks that could impair the LLP’s ability to meet immediate financial commitments without additional funding or improved cash management.

4. Monitoring Points:

• Net current assets/liabilities position for signs of further deterioration or improvement.
• Cash flow generation and debtor collection efficiency to ensure liquidity sufficiency.
• Changes in member loans and borrowings to detect increasing reliance on internal funding.
• Any delays or overdue filings which might indicate operational strains.
• Impact of goodwill valuation and any impairment risks in future accounts.