Credit Assessment: Open Access Finance Ltd

1. Credit Opinion: CONDITIONAL

The company presents a mixed credit profile. On the positive side, liquidity is strong with £565,153 in cash against only £33,206 in current liabilities—a current ratio exceeding 26:1. There is no long-term debt, and the balance sheet carries a substantial share premium of £2,467,649 indicating historical capital injection by shareholders.

However, significant concerns temper this position. The company has accumulated losses of £1,623,831 (up from £1,467,655 in 2023), representing an additional loss of approximately £156,176 in the latest year. Net assets have declined from £999,998 to £843,822. Cash has fallen by £138,279 year-on-year. The P&L account is filleted, so turnover and operating profit figures are unavailable, but the trajectory of retained earnings clearly indicates ongoing unprofitability. The business model (SIC 64999—Financial intermediation n.e.c.) combined with £307,711 in debtors and £3,000 in stock suggests this may be an investment or lending vehicle rather than a trading enterprise generating recurring revenue.

Recommendation: Any credit facility should be short-term only, with consideration for security against the company's liquid assets. Ongoing losses will continue to erode the capital base, and without visibility on revenue generation, the capacity for debt service from operations is unproven.

2. Financial Strength

Balance Sheet Composition (FY2024):

Key Observations:

• Capital Structure: The equity position is supported almost entirely by the share premium account (£2,467,649), which has remained static since at least 2019. This represents capital contributed by the two director-shareholders rather than retained earnings. The share capital itself is negligible at £4.

• Accumulated Losses: Negative retained earnings of £1,623,831 represent 65.8% of the share premium. If losses continue at the current rate (~£156k p.a.), the share premium cushion would be fully eroded within approximately 15.8 years, though the trajectory has been inconsistent year-to-year.

• Asset Quality: Current assets represent 99.9% of total assets, with cash (£565,153) and debtors (£307,711) comprising the bulk. The minimal fixed asset base (£1,164) confirms this is not a capital-intensive operation.

• Leverage: The company has zero long-term debt. The only liabilities are £33,206 in current creditors, which are trivially covered by current assets. Gearing is effectively nil.

• Net Asset Trend: Net assets have declined in 5 of the last 6 years for which we have comparable data, from a peak of £999,998 (2023) and earlier £975,957 (2019), suggesting sustained value destruction.

3. Cash Flow Assessment

Liquidity Position: - Cash at bank: £565,153 (FY2024), down from £703,432 (FY2023) - Current liabilities: £33,206 - Cash coverage of current liabilities: 17x — exceptionally strong

Working Capital: - Net current assets: £842,658 - Debtors: £307,711 (down from £337,454 — a 8.8% decline, which could indicate either reduced activity or better collection) - Stocks: £3,000 (unchanged — unusual for a financial intermediation business; may represent minor inventory or work-in-progress)

Cash Flow Indicators (derived from balance sheet movements):

*Note: FY2023 retained earnings decline calculated from FY2022 figure of (£1,311,479) implied by the £2,467,649 shareholders' funds and £999,998 net assets.

Assessment: The company is burning approximately £138-156k per annum in cash. At the current cash balance of £565,153, this provides a runway of approximately 3.6-4.1 years before cash is fully depleted, assuming no change in operations. However, this assumes: - No material increase in losses - No withdrawal of capital by shareholders - No unforeseen liabilities

The absence of a P&L statement (filleted accounts) means we cannot assess the quality or sustainability of any revenue. The debtors figure of £307,711 could represent loans, investments, or trade debtors — without further detail, recoverability is uncertain.

4. Monitoring Points

Immediate Concerns:

1. Revenue Visibility: Request full (unfilleted) accounts or management information showing turnover, gross margin, and net profit trajectory. The current filing regime obscures the trading performance essential for credit assessment.

2. Debtor Quality: £307,711 in debtors (35% of total assets) requires investigation. Are these trade debtors, inter-company balances, or loans? What is the aging profile? Any impairment risk?

3. Loss Trajectory: The FY2024 loss of ~£156k is consistent with FY2023. Confirm whether losses are narrowing or accelerating and what the directors' plan is for achieving breakeven.

4. Going Concern Dependency: The directors' going concern statement references "sufficient resources and support" — clarify whether this implies willingness of shareholders to provide additional capital if needed, or whether it relies solely on existing cash reserves.

5. Nature of Business Activity: SIC 64999 is broad. Clarify the actual business model — is this an investment holding company, a lending platform, or a trading entity? This significantly affects risk assessment.

Ongoing Monitoring:

6. Cash Position: Track quarterly. A decline below £400k would represent less than 3 years of runway and should trigger a review.

7. Net Assets: Any further decline below £700k (representing <28% of share premium consumed) should prompt enhanced monitoring.

8. Creditor Levels: While currently low at £33k, any significant increase could indicate operational changes or cash flow pressure.

9. Filing Compliance: Accounts are currently up to date (next due 27 August 2027). Monitor for any late filings which could indicate governance concerns.

10. Related Party Transactions: Given the financial intermediation classification and two 50/50 shareholders, investigate whether debtor/creditor balances include related party items that could affect recoverability.