MISTRY BROTHERS RENTALS LIMITED

Executive Summary

MISTRY BROTHERS RENTALS LIMITED presents a mixed credit profile with strong asset backing but weak liquidity and working capital. The company relies on secured loans and director guarantees to manage financial obligations. Conditional credit approval is suggested with stringent monitoring of cash flow, debt servicing, and operational performance.

MISTRY BROTHERS RENTALS LIMITED - Analysis Report

Company Number: 13206176

Analysis Date: 2025-07-20 15:48 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   MISTRY BROTHERS RENTALS LIMITED shows stable asset backing through investment property valued at £443,500, which supports lending capacity. However, the company reports significant net current liabilities of approximately £200,765 and outstanding secured bank loans of £215,168, indicating tight liquidity. The directors have provided personal guarantees on borrowings, mitigating some lender risk. Given the micro-entity status and limited operating history since incorporation in 2021, approval is recommended subject to close monitoring of cash flow and covenant compliance.

2. Financial Strength:
   The company’s balance sheet is heavily asset-backed by investment property, supporting net assets of £30,973 as at 31 March 2024, improved from £18,526 the prior year. However, current liabilities exceed current assets by a sizeable margin, indicating working capital strain. Long-term liabilities largely consist of secured bank loans. Share capital is minimal (£100), reflecting a small equity buffer. Overall, the company’s financial strength is moderate but reliant on asset value and director support.

3. Cash Flow Assessment:
   Cash held at bank declined from £29,981 to £9,366 year-on-year, and debtors remain negligible. The net current liability position points to ongoing liquidity pressure, potentially due to loan repayments or operating costs exceeding inflows. The company’s continued ability to meet short-term obligations depends heavily on rental income and director financing. Close attention should be paid to cash flow forecasts and timely servicing of secured debt.

4. Monitoring Points:

• Liquidity and working capital trends, especially cash balances and creditor turnover
• Servicing and refinancing of secured loans, including adherence to bank covenants
• Rental income stability and any changes in investment property valuation
• Director advances and any changes in personal guarantees
• Timely filing of accounts and confirmation statements to ensure compliance