Company Number: 13110780

Analysis Date: 2025-07-20 12:03 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Solid Build Contractors Ltd shows ongoing trading activity with positive net assets but current liquidity pressures. The company’s net assets have declined significantly in the latest year, primarily due to increased current liabilities and reduced net current assets turning negative. However, the presence of director loans and continued trading suggest some financial support and operational continuity. Conditional approval is recommended, subject to enhanced monitoring of cash flow and working capital management to ensure timely debt servicing and avoidance of liquidity strain.

2. Financial Strength:

• Net assets decreased from £20,335 in 2023 to £9,944 in 2024, indicating reduced overall financial strength.
• Fixed assets reduced modestly to £20,912 from £27,883, showing some asset depreciation but no significant disposals.
• The company carries finance lease obligations totaling £15,730, down from £22,490, indicating some debt reduction but still a material liability.
• Share capital is minimal (£2), reflecting a typical small private company structure.
• Directors’ loans of approximately £38,201 are significant and interest-free, indicating reliance on shareholder funding to support operations.

3. Cash Flow Assessment:

• Current assets at £45,557 are slightly higher than the prior year but current liabilities have doubled to £46,203, resulting in a negative net current asset position (-£646).
• Cash on hand has dropped sharply from £8,196 to £2,480, raising concerns about immediate liquidity.
• High levels of trade debtors (£4,876) and significant directors’ loan advances (£38,201) are part of current assets but are less liquid than cash.
• The company has short-term borrowing including bank loans (£4,546) and other loans (£7,253) contributing to current liabilities, increasing short-term repayment pressures.

4. Monitoring Points:

• Track monthly cash flow closely to ensure the company can meet short-term liabilities, especially bank loans and VAT obligations.
• Monitor trade debtor aging and the collectability of directors’ loans to ensure these assets are available to support liquidity.
• Review finance lease and hire purchase commitments regularly to anticipate and plan for repayments.
• Watch profitability trends when full profit and loss figures become available, as current accounts do not disclose profitability, limiting assessment of operational cash generation.
• Assess management’s plans for working capital improvement and debt reduction to mitigate the recent decline in net assets.