OPEN COLLEGE NETWORK CREDIT4LEARNING
Company number 04703401 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Assessment: OPEN COLLEGE NETWORK CREDIT4LEARNING
1. Credit Opinion: DECLINE
This application must be declined. The company is currently subject to a "Proposal to Strike off" at Companies House, which means an active process is underway to dissolve the entity from the register. Extending credit to a company facing dissolution carries unacceptable risk—any facility would likely become irrecoverable upon striking off. Additionally, accounts are overdue, and the company has reported consecutive operating losses with declining revenues.
2. Financial Strength
Balance sheet is thin and deteriorating:
| Metric | 2020 | 2019 | Movement |
|---|---|---|---|
| Total Assets | £79,522 | £71,821 | +10.7% |
| Total Liabilities | £46,248 | £35,917 | +28.8% |
| Net Assets | £33,274 | £35,904 | -7.3% |
| Shareholders' Funds | £33,274 | £35,904 | -7.3% |
The balance sheet shows erosion of equity. Net assets declined by £2,630 year-on-year, mirroring the loss for the period. The company has no long-term debt, but this is cold comfort when liabilities are growing faster than assets (28.8% vs 10.7%).
Tangible fixed assets are negligible at £2,007—primarily fixtures, fittings, and office equipment. There is no property or meaningful asset base to secure against. The company operates from what appears to be a leasehold premises with a break clause exercisable by either landlord or tenant, adding further instability.
Capital structure concern: As a company limited by guarantee with no share capital, there is no equity cushion in the traditional sense. Members' liability is limited to £1 each—providing zero recourse for creditors.
3. Cash Flow Assessment
Operating performance is weak:
| Metric | 2020 | 2019 |
|---|---|---|
| Turnover | £229,492 | £251,776 |
| Operating Loss | (£2,648) | (£24,503) |
| Loss Before Tax | (£2,630) | (£24,487) |
| Cash at Bank | £19,765 | £15,712 |
While the 2020 loss is significantly reduced from 2019, this remains a loss-making entity. Revenue declined by approximately 8.8%, and the company has not demonstrated an ability to generate consistent profitability.
Liquidity position: - Current Assets: £77,515 - Current Liabilities: £46,248 - Net Current Assets: £31,267 - Current Ratio: 1.67x
The current ratio appears adequate on the surface, but the quality of current assets is questionable: - Other debtors of £24,000 represent 31% of current assets. These may be related-party balances or advances that could be difficult to realise. - Trade debtors of £28,802 with only £229k turnover implies approximately 46 days sales outstanding—reasonable but requiring verification of collectibility.
Creditor pressure is mounting: Taxation and social security liabilities surged from £4,424 to £19,227—a 335% increase. This suggests either underpayment in prior periods or significant accrued obligations, both of which signal cash stress.
4. Monitoring Points
Should the strike-off action be resolved and the company return to normal status, the following would require ongoing scrutiny:
| Metric | Risk Level | Rationale |
|---|---|---|
| Strike-off status | Critical | Must be resolved before any credit consideration |
| Accounts filing | High | Currently overdue—indicates governance or resource issues |
| Revenue trajectory | High | Declining turnover trend must be reversed |
| Taxation liabilities | High | Rapid escalation suggests cash management problems |
| Other debtors | Medium | £24k balance needs explanation—potential related-party extraction |
| Leasehold break clause | Medium | Premises security is uncertain |
| Profitability | High | Consecutive losses eroding an already thin equity base |
| Cash reserves | Medium | £19.8k provides limited buffer for a company with £260k operating costs |
Additional Concerns
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Governance uncertainty: The company has seven directors listed but the filed accounts reference only five holding office during the period. The relationship between the current board and historical directors requires clarification.
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Charity status complications: As a charitable entity, the company has restrictions on distribution and purpose. Any credit facility would need to align with charitable objectives, and enforcement options may be limited.
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Sector risk: Educational support services face ongoing funding uncertainty, particularly in the current economic environment with pressure on public sector and educational budgets.