Company Number: 15023628

Analysis Date: 2025-07-20 17:48 UTC

1. Credit Opinion: CONDITIONAL APPROVAL Lych Gate Ltd is a newly incorporated private limited company (since July 2023) engaged in real estate trading and development. Its latest financials to October 2024 reveal net current liabilities of £2,204 and shareholders’ funds of negative £2,204, indicating a slight balance sheet deficiency. The company has significant related party loans (£567,600) from directors and shareholders, evidencing reliance on shareholder support for liquidity. The directors have also provided assurances of continued financial support for at least 12 months. Given these factors, credit approval is conditional upon ongoing director backing and monitoring of operating cash flows as the company transitions from start-up to trading maturity.

2. Financial Strength:

• Total current assets: £966,899 (mainly stocks of £946,088)
• Current liabilities: £969,103 (high creditor balances including £180,000 due to related parties)
• Net current liabilities: £2,204 (marginally negative working capital)
• Shareholders’ funds: negative £2,204 (small negative equity) The balance sheet shows a start-up phase with significant inventory (property development projects) and high creditor balances. The negative equity is minimal but notable. The high related party loans and trade balances indicate that financial strength depends heavily on directors/shareholders. No fixed assets or long-term debt are reported.

3. Cash Flow Assessment:

• Cash at bank is low at £15,910, which is minimal relative to liabilities.
• Debtors are very low (£4,901), suggesting limited trade receivables or early stage sales.
• Reliance on shareholder loans (£567,600) is critical for liquidity.
• The company has no employees, implying low overheads but also limited operational scale.
• Working capital management will be key, as current liabilities slightly exceed current assets.
• Directors’ commitment to provide financial support is essential to cover cash shortfalls.

4. Monitoring Points:

• Track progress in converting stock (property developments) into cash or receivables.
• Monitor cash balances monthly to ensure liquidity coverage of short-term obligations.
• Watch creditor balances, especially related party trade debts, for any changes.
• Review new funding or capital injections from directors/shareholders as a liquidity buffer.
• Assess progress in trading operations to move towards positive net assets and profitability.
• Confirm timely filing of next accounts and confirmation statements to maintain compliance.