Company Number: 13804149

Analysis Date: 2025-07-20 16:59 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Millburt Electrical Ltd shows improving financial strength with growing net current assets and shareholders’ funds over two years. However, the company is very small (micro-entity) with only two employees, limited trading history since incorporation in late 2021, and a significant receivable balance due from directors (£131k), which may affect liquidity reliability. The absence of audited financials and profit & loss details limits full assessment. Recommend credit with limits tied to ongoing monitoring of cash flows and receivables from directors, and periodic review of updated accounts.

2. Financial Strength:
   The company’s balance sheet shows a solid improvement from 2022 to 2023: current assets increased from £53.6k to £230.4k, current liabilities rose to £90k, but net current assets improved to £140k. Shareholders’ funds more than tripled to £136.9k. This reflects retained earnings and/or capital injections. However, a large portion of current assets (£131k) is an interest-free, repayable-on-demand loan to directors, which is not a traditional liquid asset and could impact true operational liquidity if funds are not recoverable.

3. Cash Flow Assessment:
   Liquidity appears adequate with net current assets at £140k exceeding current liabilities by a comfortable margin. However, working capital quality is diluted due to the director loan balance. The company employs only two people and operates in electrical installation, which typically requires steady cash flow to meet supplier and payroll obligations. The interest-free director loan may be a temporary internal funding measure but should be closely monitored to ensure it does not mask underlying cash flow constraints.

4. Monitoring Points:

• Recoverability and status of director loan balances in current assets.
• Timely filing of next financial accounts and confirmation statements.
• Profitability trends once profit & loss accounts become available.
• Changes in working capital structure and any increase in trade creditors or external debt.
• Business expansion or hiring plans indicating operational scaling.