Company Number: SC678900

Analysis Date: 2025-07-29 20:23 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Ochil Financial Planning Ltd shows a significant increase in net assets primarily due to a £200,000 investment related to a private annuity contract with the director. While the company is currently solvent with net assets of £148,616 as of 31 March 2024, it has a negative net working capital position (£-52,059) driven by sizeable current liabilities (£207,499) mainly comprising a director's loan account and corporation tax. This weak liquidity position suggests some short-term cash flow risk. Approval for credit facilities can be considered provided the bank obtains comfort on the director’s ongoing support, the nature and timing of repayment of the director’s loan, and the company’s ability to generate sufficient cash flows from operations to meet its obligations.

2. Financial Strength:
   The company’s financial strength has improved substantially from prior years due to the capital advance of £200,000 recorded as an investment asset, which underpins the net asset value increase from £223 in 2023 to £148,616 in 2024. The balance sheet shows mostly fixed assets (£200,675) and cash (£155,440). However, current liabilities have increased sharply to £207,499, including £61,754 corporation tax and a director’s loan of £139,744. Shareholders’ funds are positive but concentrated in non-liquid investments and a director loan that may affect creditor priority. The company remains a micro entity with low share capital (£3). Overall, the balance sheet is structurally improved but relies heavily on director financial involvement.

3. Cash Flow Assessment:
   Cash at bank stands at £155,440, which is adequate to cover a portion of current liabilities but not all, resulting in negative net current assets. There is no trade debtor balance, indicating little to no receivables, and thus limited short-term operating cash inflows from customers. The director’s loan account balance owing to the company has disappeared, replaced by a liability owed to the director, suggesting ongoing financial support is being extended by the director rather than by operating cash flow generation. The private annuity contract provides an annual income (£8,559) but this is relatively modest compared to liabilities. Liquidity risk is present, and working capital management will be critical.

4. Monitoring Points:

• Monitor director’s loan account arrangements and repayment schedule to assess potential liquidity impact.
• Watch corporation tax payments and any accrual changes as this is a material current liability.
• Review cash flow forecasts focusing on operational cash generation to cover short-term liabilities.
• Keep track of any changes in annuity income or additional capital injections from the director.
• Assess company’s ability to file timely accounts and returns to ensure ongoing compliance and transparency.