Company Number: 14634083

Analysis Date: 2025-07-29 17:09 UTC

1. Credit Opinion: DECLINE

GAP RENEW LTD is a newly incorporated private limited company (incorporated in 2023) operating in the repair of electrical equipment sector. The latest financials (period ended 31 December 2023) show significant liquidity and solvency concerns. The company reports net current liabilities of £473,455 and overall net liabilities of £358,494, indicating a weak balance sheet with negative shareholders’ funds. Current liabilities of £609,923 are substantially higher than current assets of £136,468, raising serious doubts about the company’s ability to meet short-term obligations. The company relies heavily on amounts owed to group undertakings (£400,000), which may not be sustainable or guaranteed. Given these factors and the absence of any profitability or cash flow data, the company does not demonstrate adequate financial strength or resilience to support new credit facilities.

2. Financial Strength:

• Fixed assets total £114,961, with a mix of intangible (£34,738) and tangible assets (£80,223).
• Current assets of £136,468 include cash of £36,291 and trade debtors of £15,655.
• Current liabilities (£609,923) mainly consist of trade creditors (£182,893) and significant intra-group debt (£400,000).
• Negative net current assets and shareholders’ funds reflect capital deficiency.
• The company’s going concern note indicates directors’ confidence but this is not yet supported by financial evidence.
• The company is a micro entity, limiting detailed financial disclosures.
• The directors appear to have taken responsibility for accounting standards compliance, but the absence of profit and loss details limits assessment of trading performance.

3. Cash Flow Assessment:

• Cash at bank is £36,291, insufficient to cover near-term liabilities.
• Working capital is deeply negative (-£473,455), indicating reliance on external funding or shareholder support.
• Debtors (£30,104) and stock (£70,073) provide some liquidity but unlikely to bridge the gap with creditors.
• The £400,000 owed to group undertakings may be a related party loan, which if not repayable on demand, could provide short-term relief but also indicates dependency.
• Lack of profit and loss data restricts full cash flow analysis, but the balance sheet suggests cash flow challenges.

4. Monitoring Points:

• Monitor quarterly cash flow statements and any changes in related party funding terms.
• Watch for improvements in net current assets and shareholder equity.
• Track trade creditor ageing and payment patterns to assess working capital management.
• Review any forthcoming profit and loss filings for operational performance and cash generation.
• Monitor any changes in directors or ownership structure that may impact governance or financial strategy.
• Assess the timeliness and completeness of future filings given the company’s recent incorporation.