NLC CAPITAL LTD

Executive Summary

NLC Capital Ltd is currently financially weak, with negative net assets and poor liquidity, relying heavily on director funding and investment holdings rather than operational cash flow. The company’s inability to cover short-term liabilities and absence of equity cushion present a high credit risk. Based on the current financial position, credit facilities are not recommended without significant improvement in profitability and working capital management.

NLC CAPITAL LTD - Analysis Report

Company Number: 13166445

Analysis Date: 2025-07-29 20:52 UTC

1. Credit Opinion: DECLINE. NLC Capital Ltd exhibits significant financial distress as evidenced by negative net assets and shareholders’ funds of £9,778 at the latest year-end. The company’s current liabilities of £43,253 substantially exceed current assets of £29,663, resulting in a negative working capital position of £13,590. The director’s loan account shows a substantial negative balance (£42,303), reflecting reliance on director funding which has been repaid and reversed during the year, indicating cash flow management issues. There is no evidence of profitability or positive cash generation, and the business appears heavily reliant on investments rather than trading income, raising concerns about sustainability and debt servicing capability.

2. Financial Strength: The balance sheet reveals weak financial health. Total assets less current liabilities stand at a negative £9,778, highlighting insolvency on a balance sheet basis. Fixed assets are minimal (£3,812), and the bulk of current assets are invested funds (£29,549), not cash or receivables. Negative shareholders’ equity signals accumulated losses or funding gaps since incorporation in 2021. The very low share capital (£1) and lack of equity buffer further compromise financial resilience.

3. Cash Flow Assessment: Cash at bank is nominal (£114), insufficient to cover immediate liabilities. Negative net current assets indicate liquidity stress and working capital deficiency. The director’s loan account movements suggest the company has had to rely on director advances and repayments, which may not be sustainable or formalized as a long-term funding source. There is no indication of operating cash inflows or profits that could support debt repayment or new credit facilities.

4. Monitoring Points:

• Monitor liquidity closely, specifically cash and near-cash assets versus short-term creditors.
• Watch for any formalization or restructuring of director loans and related party transactions.
• Review subsequent trading performance to assess if the company can return to profitability and positive working capital.
• Track any changes in investment holdings and their realizability to support liquidity.
• Ensure timely filing of future accounts and confirmation statements to avoid compliance risks.