Company Number: 13481086

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

1. Credit Opinion: CONDITIONAL APPROVAL
   Farley Finance Ltd is a micro private limited company with a very modest net asset base and a recent decline in net assets from £6,610 (2023) to £1,066 (2024). The company shows significant liabilities falling due after more than one year, which nearly offset total assets. This weak equity position indicates limited financial cushion to absorb shocks. Although the company is current with filings and appears active, the low net assets and apparent director loan write-off (negative loan balance) raise concerns about cash flow management and financial resilience. Credit approval could be considered with conditions such as monitoring timely repayment performance, reviewing updated financials, and possible collateral or personal guarantees to mitigate risk.

2. Financial Strength:
   The balance sheet shows fixed assets reduced from £33,022 to £25,446 year-on-year, and current assets dropped from £6,357 to £4,238. Current liabilities remain significant at £32,405 (2024) and total liabilities after one year are very high at £32,405, almost equalling total assets. Net current assets remain positive but have declined from £11,538 to £8,025. The net assets have shrunk sharply to a marginal £1,066, highlighting a fragile equity position. The company relies heavily on liabilities to finance its assets, which is risky for a micro business.

3. Cash Flow Assessment:
   Current assets are low and have decreased, while current liabilities remain substantial. The net current assets positive balance suggests some short-term liquidity, but the magnitude of liabilities beyond one year is a red flag for longer-term solvency. The director loan balances indicate a write-off or repayment issues, suggesting potential internal cash flow strain. Working capital is tight, and the company may face challenges meeting obligations without additional cash inflows or capital injections.

4. Monitoring Points:

• Net assets and equity position: watch for any further erosion or improvement.
• Director loans and related party transactions: ensure transparency and repayment.
• Timeliness of statutory filings and financial updates.
• Liquidity ratios, particularly current ratio and quick ratio trends.
• Any changes in the control structure or business operations impacting financial stability.