SNS COMMERCE LTD

Executive Summary

SNS COMMERCE LTD is currently in a financially weak position with significant negative equity and working capital deficits. The company’s liquidity and solvency concerns, combined with ongoing losses and reliance on director loans, make it unsuitable for new credit facilities at this time. Close monitoring of cash flows and creditor funding is essential to reassess creditworthiness in the future.

SNS COMMERCE LTD - Analysis Report

Company Number: 13304631

Analysis Date: 2025-07-20 15:28 UTC

1. Credit Opinion: DECLINE
   SNS COMMERCE LTD exhibits significant financial distress indicators. The company has accumulated substantial losses, resulting in negative net assets of approximately £50,634 as of the latest accounting period. Current liabilities (£66,136) far exceed current assets (£14,420), causing a large working capital deficit (£-51,716). The company’s cash position, while improved to £9,720, remains insufficient relative to short-term obligations. The increasing reliance on director loans (£28,900) and other creditors suggests liquidity strain. Without clear evidence of profitability or positive cash flow generation, the risk of default on credit obligations is high. The absence of an external audit limits transparency but is typical for small companies. Overall, the company is not currently creditworthy for new lending without substantial mitigation or guarantees.

2. Financial Strength:
   The balance sheet shows a weak financial position. Net liabilities have more than doubled over three years, from £21,973 in 2022 to £50,634 in 2024, indicating ongoing losses and erosion of equity. Fixed assets are minimal (£1,082 in computer equipment) and unlikely to provide collateral value. The company’s capital base is very small (£100 share capital) and insufficient to absorb further losses. The growing creditor balance, including significant director loans, signals dependency on related-party funding, which may not be sustainable. Overall, the financial strength is poor, with solvency concerns evident.

3. Cash Flow Assessment:
   Cash balances increased from £1,072 in 2023 to £9,720 in 2024, which is a positive sign, but current liabilities remain nearly six times higher than cash and debtors combined. The large working capital deficit implies the company may struggle to meet short-term liabilities as they fall due. Debtors (VAT receivable) are consistent but relatively low and may be subject to collection risk. The absence of profit and loss data limits detailed cash flow analysis, but the growing losses reflected in shareholders’ funds suggest negative operating cash flow. The company’s liquidity position is fragile, relying heavily on director loans and creditor funding.

4. Monitoring Points:

• Monitor quarterly cash flow performance and liquidity ratios, especially current ratio and quick ratio.
• Track changes in director loans and creditor balances for signs of funding stress or informal financing arrangements.
• Watch for any improvements in profitability or reduction in losses that could strengthen equity.
• Review filing of future annual accounts for audit or review triggers, and any indications of restructuring or insolvency proceedings.
• Monitor payment history on supplier and tax obligations to detect any signs of payment delays or defaults.