Company Number: 12428531

Analysis Date: 2025-07-20 16:27 UTC

Credit Opinion:
CONDITIONAL APPROVAL. Purposepeople Ltd is a small private limited company within the mental health occupational therapy sector. The company shows a modest net asset base and has recently taken on a secured bank loan of £50,000, which increases its current liabilities substantially. While the company has improved its cash position and turnover since inception, the working capital position remains slightly negative, indicating tight liquidity. The directors have supported the business with advances, demonstrating commitment, but the relatively low equity and current liabilities exceeding current assets require monitoring. Approval is recommended contingent on quarterly cash flow updates and continued director support.

Financial Strength:

• Shareholders’ funds have increased from £75 in 2023 to £287 in 2024, reflecting small retained earnings growth.
• Total assets less current liabilities are positive but marginal (£287), indicating the company is only just solvent on a net asset basis.
• The balance sheet shows fixed tangible assets of £1,661 and current assets of £95,361, but current liabilities of £96,735 create a slight working capital deficit (£1,374 negative).
• The recent introduction of a £50,000 secured bank loan adds leverage and interest obligations; however, it is supported by an all-assets debenture, which is typical for small business lending.
• The company has minimal share capital (£2), suggesting limited equity buffer.

Cash Flow Assessment:

• Cash at bank improved significantly to £51,365 in 2024 from £10,306 in 2023, indicating better liquidity management or recent loan proceeds.
• Debtors increased substantially to £43,996, mostly comprising directors’ current accounts (£38,020), which may not be immediately realisable cash.
• Negative net current assets indicate the company is dependent on managing payables and receivables carefully.
• Directors continue to advance funds (£21,293 and £16,728 outstanding balances), which supports working capital and mitigates liquidity risk.
• Dividends paid (£67,500) are notable given the small equity base, potentially constraining retained earnings growth.

Monitoring Points:

• Monitor quarterly cash flow statements to ensure liquidity remains adequate and the company can service new debt.
• Track debtor aging, especially director current accounts, to assess real cash availability.
• Review bank loan repayment schedules and covenant compliance.
• Observe profitability trends in future accounts to confirm capacity to generate sustainable earnings and build equity.
• Consider any further director advances or withdrawals which could impact working capital.
• Watch for any late filings or changes in company status or director appointments.