MELLON 21 LIMITED

Executive Summary

Mellon 21 Limited currently operates with negative equity and limited liquidity but benefits from strong director financial support, which underpins its going concern status. Credit approval is conditional on continued director backing and improvement in financial metrics. Close monitoring of cash flows, profitability, and loan arrangements is essential to managing credit risk going forward.

MELLON 21 LIMITED - Analysis Report

Company Number: 13543851

Analysis Date: 2025-07-29 18:57 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Mellon 21 Limited shows a weak financial position with net liabilities of £113,002 as of April 2024, indicating negative equity and potential solvency concerns. However, the company is supported by director loans of £303,720 that are interest-free and repayable on demand, demonstrating strong shareholder backing. The directors have confirmed ongoing financial support for at least 12 months, which mitigates immediate credit risk. Approval is conditional on continued director support and monitoring of cash flow improvements and profitability.

2. Financial Strength:
   The company’s balance sheet reveals minimal fixed assets (£120) and current assets primarily consisting of long-term debtors (£193,498) with negligible cash (£100). Current liabilities exceed current assets by £113,122, reflecting a strained working capital position. Shareholders’ funds are negative, and the accumulated deficit in the profit and loss account is substantial at £113,102. The restatement of prior year debtors suggests some accounting adjustments but does not materially improve financial strength. Overall, the company is financially weak and reliant on director loans for solvency.

3. Cash Flow Assessment:
   Cash at bank is minimal (£100), indicating very limited liquidity. Reliance on directors’ loans (£303,720) to meet liabilities due within one year is critical, as there are no other apparent sources of working capital. No employees are recorded, which may limit overheads but also raises questions about operational scale and revenue generation. The directors’ willingness to provide ongoing financial support is a key positive factor in the liquidity assessment, but the company’s internal cash flows appear insufficient to cover short-term obligations independently.

4. Monitoring Points:

• Director loan account balance and terms: Track any changes in director support or loan repayments.
• Profitability and cash flow generation: Watch for signs of revenue growth or cost containment to reduce reliance on loans.
• Working capital position: Observe changes in current assets and liabilities to assess liquidity improvements.
• Financial reporting compliance: Maintain timely filing of accounts and confirmation statements to ensure transparency.
• Business strategy and operational developments: Monitor any shifts that may improve financial stability or increase risk.