Company Number: 13111992

Analysis Date: 2025-07-20 14:01 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Harmony Homes 2020 Limited is a recently incorporated private limited company specializing in domestic building construction. Its balance sheet shows net liabilities of £7,838 at the 2023 year-end, indicating a small equity deficit. The company has significant related-party debt (£506,650 owed to Marymead Limited) which carries interest at a margin above base rate, suggesting reliance on shareholder or affiliated funding. Given the small scale and net liabilities, the company’s creditworthiness is currently constrained. However, the directors affirm going concern status and the company has no overdue filings. Approval is conditional on ongoing monitoring of cash flow and reduction in related-party liabilities, accompanied by collateral or guarantees if extending credit.

2. Financial Strength:

• Net liabilities of £7,838 reflect a negative equity position, although the amount is modest.
• Total current assets of £503,224 (mostly stock) versus current liabilities of £511,062 means the company has a slight working capital deficit (£7,838).
• The main asset is stock valued at £499,363, which is a substantial increase from prior year (£23,095), indicating inventory buildup possibly for new contracts.
• Debtors and cash balances are minimal (£176 and £3,685 respectively), highlighting limited liquid assets.
• The capital base is minimal with £100 share capital, showing low invested equity.

3. Cash Flow Assessment:

• Cash at bank (£3,685) is low relative to liabilities, suggesting limited liquidity to cover short-term obligations independently.
• The company relies heavily on loans from related parties, particularly Marymead Limited (£506,650), which though interest-bearing, lacks fixed repayment terms.
• No employees other than directors, keeping overhead low but also indicating limited operational scale.
• The company’s ability to convert stock into cash in a timely manner will be critical. The absence of overdue filings and directors' statement of going concern are positive but warrant scrutiny of actual cash generation.

4. Monitoring Points:

• Progress in reducing net liabilities and related-party debt levels, especially from Marymead Limited.
• Liquidity trends, particularly cash balances and debtor collections.
• Inventory turnover and stock valuation, ensuring no impairment or obsolescence risks.
• Timely filing of accounts and confirmation statements to avoid compliance risks.
• Any changes to director or secretary appointments and potential related-party transactions.