Company Number: 14155322

Analysis Date: 2025-07-20 13:20 UTC

1. Risk Rating: HIGH
   ECT FINANCE LIMITED exhibits significant financial distress signals, including persistent negative net assets and net current liabilities, indicating substantial solvency and liquidity risks.

2. Key Concerns:

• Negative Net Assets and Shareholders’ Funds: The company has reported net liabilities of approximately £4,037 at the latest year-end (2024), worsening from prior years, signaling erosion of capital and solvency risk.
• Working Capital Deficit: Net current liabilities of £4,037 indicate the company’s current liabilities exceed current assets, raising concerns about the company’s ability to meet short-term obligations.
• Reliance on Director Loans: The 2024 accounts show £2,380 in loans from directors classified as current liabilities, suggesting dependence on related party funding which may not be sustainable or formalized.

3. Positive Indicators:

• Compliance with Filing and Reporting: The company has filed accounts and confirmation statements on time, with no overdue filings, indicating good regulatory compliance.
• Small Entity Status with Exemption from Audit: As a small company, it benefits from simplified reporting requirements reducing administrative burden.
• Single Employee Operation: With only one employee, the company may have low operating overheads, which could be positive if revenue generation improves.

4. Due Diligence Notes:

• Examine Director Loans Terms: Investigate the nature, terms, and repayment plans of the director loans to assess risk of withdrawal or conversion to equity.
• Review Business Model and Revenue Streams: Limited information is available on revenue or profitability; further inquiry into how the company plans to improve financial performance is necessary.
• Assess Cash Flow Projections: Cash at bank is minimal (£694), so detailed cash flow forecasts and funding plans should be reviewed.
• Verify No Undisclosed Liabilities: Given the small scale and losses, verify if there are contingent liabilities or off-balance-sheet obligations.
• Confirm Director Conduct and Governance: No information on director disqualifications or governance issues, but these should be checked as a routine measure.