LOYAL TO THE LIMIT DRIVING SCHOOL LTD

Executive Summary

Loyal To The Limit Driving School Ltd is a start-up with improving but still fragile financial health, characterized by negative working capital and a low equity base. The company’s limited liquidity and small asset base warrant conditional credit approval with stringent monitoring of cash flow and short-term liabilities. Continued business growth and improved profitability will be critical for future creditworthiness.

LOYAL TO THE LIMIT DRIVING SCHOOL LTD - Analysis Report

Company Number: 14269087

Analysis Date: 2025-07-19 12:32 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Loyal To The Limit Driving School Ltd is a newly established private limited company (incorporated 2022) operating in the driving school sector. The company shows modest growth in net assets (from £96 in 2023 to £962 in 2024), indicating some progress in financial stability. However, the company currently has negative net working capital (£-2,413 in 2024) due to current liabilities exceeding current assets. Given the thin equity base and negative working capital, the company’s ability to meet short-term obligations and service new debt is constrained. Approval is recommended only with conditions that include regular monitoring of cash flow and receivables, as well as limits on the size and tenor of credit facilities.

2. Financial Strength:
   The balance sheet reveals that the company holds fixed tangible assets (a motor vehicle) valued at £3,375 net of depreciation. Current assets are minimal (£1,149), mainly cash (£1,022), while current liabilities stand at £3,562, leading to a working capital deficit. Shareholders’ funds remain low at £962 but have improved from the prior year’s £96. The lack of significant retained earnings and the small equity cushion reflect limited financial strength. The company’s asset base is concentrated in depreciating fixed assets and minimal liquid assets, increasing financial risk.

3. Cash Flow Assessment:
   Cash at bank has increased from £533 in 2023 to £1,022 in 2024, suggesting some improvement in liquidity. However, the persistent negative net current assets indicate that the company is reliant on short-term creditor financing to fund operations. No detailed income statement or cash flow statement is provided, but the small working capital deficit and low cash buffer imply tight liquidity management is essential. The business is dependent on timely cash inflows, and any delays in customer payments or unexpected expenses could strain cash resources.

4. Monitoring Points:

• Track monthly cash flow and liquidity ratios closely to ensure the company can meet current liabilities.
• Monitor the aging of payables and receivables to avoid worsening working capital.
• Watch for any increase in current liabilities relative to current assets, which could indicate additional liquidity pressures.
• Review turnover and profitability trends as they become available to confirm business growth and improve equity base.
• Ensure compliance with filing deadlines to avoid penalties and maintain creditor confidence.