Company Number: 13122148

Analysis Date: 2025-07-19 13:05 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   MELT CONSULTANCY LTD is a young private limited company operating in environmental and engineering consulting. The company demonstrates positive net current assets but shows a significant decline in net assets from £3,720 in 2023 to just £31 in 2024. This sharp drop signals potential financial strain or a significant write-down, warranting caution. The director’s loan account liabilities have increased, indicating reliance on director financing. Approval for credit facilities should be granted conditionally, subject to monitoring ongoing profitability and capital structure stability.

2. Financial Strength:
   The company’s balance sheet reflects a very low equity base (£31) as of the latest accounts, down from £3,720 the previous year. Total assets less current liabilities decreased to £4,653 from £7,287, driven mainly by a reduction of trade debtors to zero and an increase in creditors. The director’s loan account (£4,622) constitutes the majority of non-current liabilities, showing dependence on director funding rather than external borrowings. The company remains a micro-entity with minimal tangible assets and limited share capital (£1).

3. Cash Flow Assessment:
   Cash at bank stands at £7,036, which covers current liabilities of £2,383 comfortably, indicating adequate short-term liquidity. Net current assets remain positive at £4,653, supporting working capital needs. However, the elimination of trade debtors from £2,000 to zero suggests possible revenue recognition changes or collection issues. The reliance on director’s loan for longer-term funding implies limited access to external financing and potential cash flow vulnerability if director support reduces.

4. Monitoring Points:

• Track profitability and P&L reserves to ensure recovery from near-zero equity position.
• Monitor director’s loan account balance and future injections or repayments.
• Observe trade debtor levels to confirm if zero debtors is a sustainable position or a temporary accounting shift.
• Watch cash flow trends and ability to meet current liabilities without increasing external debt.