Commercial Credit Assessment: PRAZE PROPERTIES LLP

1. Credit Opinion: DECLINE

The credit application should be declined for any meaningful facility. While the most recent accounts show a marginal improvement to net assets of £48, this entity has operated with negative net assets for at least five consecutive years (2019-2024). The balance sheet remains essentially insolvent, with working capital of just £48 against total liabilities of £91,826. The dramatic collapse from £2M+ in total assets (2017-2018) to a shell-like operation raises serious concerns about the underlying business viability and management stewardship. No income statement is filed, so there is no visibility over trading profitability or debt service capacity.

2. Financial Strength

Balance Sheet Summary (2025): | Item | £ | |------|---| | Current Assets | 91,874 | | - Debtors | 20,631 | | - Cash | 71,243 | | Current Liabilities | (91,826) | | Net Current Assets | 48 | | Fixed Assets | Nil | | Net Assets | 48 |

Key Concerns:

• Near-Zero Equity Buffer: Net assets of £48 provide no meaningful cushion against adverse movements. The entity was technically insolvent (negative net assets) from at least 2019 through 2024, with deficits ranging from -£13k to -£65k. The marginal positive position in 2025 does not constitute financial resilience.

• Historical Collapse: Total assets fell from £2,043,698 (2018) to £25,119 (2019) – a 98.8% reduction. This likely reflects disposal of the property portfolio, but the proceeds appear insufficient to clear liabilities, leaving a persistent deficit. No explanation is available in the filed accounts.

• No Fixed Assets: The balance sheet contains only current assets. The entity holds no property, equipment, or investments that could serve as collateral.

• Creditor Composition: "Other creditors" of £47,884 represent 52% of total liabilities. The nature of these obligations is unclear from the filed accounts – they could be member loans, related-party balances, or trade obligations. This opacity is a material concern.

• Accrued Expenses: At £36,606, these represent 40% of liabilities and have grown 7.4% year-on-year, suggesting ongoing obligations that may not be fully serviced.

3. Cash Flow Assessment

Liquidity Position: | Metric | 2025 | 2024 | |--------|------|------| | Cash | £71,243 | £45,180 | | Current Ratio | 1.00x | 0.81x | | Quick Ratio | 1.00x | 0.81x |

Observations:

• Cash Improvement: Cash has increased 57.7% year-on-year (£45,180 to £71,243), which is positive. However, without an income statement, the source of this cash generation is unclear – it could arise from operating activities, debtor collections, member capital injections, or asset disposals.

• Current Ratio at 1.00x: While technically meeting the 1.0x threshold, this provides zero margin. Any unexpected liability or debtor default would push the entity back into negative working capital.

• Debtors Increased 71.8%: Trade debtors grew from £12,012 to £20,631. This could indicate growing revenue, but without turnover data, it is impossible to assess debtor days or collection quality.

• No Debt Service Visibility: With no P&L filed, there is no way to assess interest cover, debt service coverage, or operating cash flow generation. This is a fundamental gap for credit assessment.

• No Long-Term Debt: All liabilities are current, meaning there are no structured repayment schedules visible, but also no long-term financing to support the business.

4. Monitoring Points

If any facility were considered (which is not recommended under current conditions), the following would require ongoing surveillance:

Additional Investigation Required: 1. Source of Cash Increase: Clarify whether cash growth is from trading, asset sales, or capital injections 2. Other Creditors Breakdown: Determine if these are member loans, related-party, or third-party obligations 3. Historical Context: Obtain explanation for the 2018-2019 balance sheet collapse and what happened to the property portfolio proceeds 4. Grier Property Developments Limited: Assess the financial standing of the corporate designated member, as this entity may be the ultimate source of support 5. Profit & Loss: Request full income statement to assess trading viability and debt service capacity

Summary Assessment