LM CONTRACTING LTD

Executive Summary

LM Contracting Ltd is a newly formed micro-entity with a strong net asset base and positive working capital, indicating good financial health for its size and age. The company’s clean filing history and controlled management structure support a credit approval with ongoing monitoring recommended as the business develops. The risk profile is low at this stage, suitable for small credit facilities aligned with its operational scale.

LM CONTRACTING LTD - Analysis Report

Company Number: SC784084

Analysis Date: 2025-07-20 19:08 UTC

1. Credit Opinion: APPROVE
   LM Contracting Ltd is a newly incorporated micro-entity with a clean financial profile and no overdue filings. The company demonstrates a strong net asset position relative to current liabilities and shows no sign of financial distress. Given the director is also the sole shareholder with significant control and the company is engaged in a specialist engineering design activity, there is reasonable confidence in its ability to service credit facilities. The unsecured director loan is minimal and repayable on demand, which does not materially impact creditworthiness.

2. Financial Strength:
   The balance sheet as of 30 September 2024 shows total current assets of £42,511 against current liabilities of £8,868, resulting in net current assets (working capital) of £38,139. The net assets equal £37,810, which is entirely composed of shareholder funds. The absence of long-term liabilities and the positive net asset base indicate a solid financial footing for a micro-entity at this early stage.

3. Cash Flow Assessment:
   Current assets primarily consist of cash and receivables, which exceeds current liabilities by a healthy margin, providing strong liquidity. The company’s operating scale is very small with one employee (the director), limiting operating overheads and cash burn risk. The unsecured, interest-free director loan of £1,264 is minor and does not pose a liquidity strain. Overall, working capital is sufficient to support short-term obligations.

4. Monitoring Points:

• Monitor future revenue growth to ensure sustainability beyond start-up phase.
• Watch for any increase in liabilities or director loans that might affect liquidity.
• Review annual filings timely to ensure no overdue accounts or confirmation statements.
• Keep track of cash flow through future periods, especially if the company takes on credit facilities.
• Given sole director/shareholder control, assess governance and financial management as company scales.