SOLWEB LIMITED

Credit Analysis: Solweb Limited

1. Credit Opinion: APPROVE

Solweb Limited presents a strong case for credit approval. The company demonstrates a sustained and healthy financial trajectory, with consistent growth in net assets, a robust cash position, and minimal reliance on external debt. The business appears resilient, with a long operating history and a clear niche in custom software development. The key risk is the company's small size and reliance on a single director, but the financials strongly support its ability to service debt obligations.

2. Financial Strength

The balance sheet is in excellent health and has strengthened considerably over the past five years.

• Net Assets: Net assets have grown from £26,270 in 2020 to £81,529 in 2025, a compound annual growth rate of over 25%. This demonstrates consistent profitability and retained earnings.
• Shareholders' Funds: Shareholders' funds are robust at £81,529, representing the entire net asset value. This provides a substantial equity cushion against any potential losses.
• Capital Structure: The company has no long-term debt on its balance sheet. The only liabilities are current liabilities (creditors due within one year) of £49,919 in 2025, which are more than adequately covered by cash alone.
• Leverage: The company is effectively debt-free from a long-term perspective. The debt-to-equity ratio, considering total liabilities vs. shareholders' funds, is very low at 0.61, indicating a conservative financial structure.

3. Cash Flow Assessment

Liquidity is a core strength and has been consistently improving.

• Cash Position: Cash and bank balances have increased from £9,461 in 2020 to £88,591 in 2025. This is a very strong cash position for a company of this size.
• Liquidity Ratio: The cash alone (£88,591) covers total current liabilities (£49,919) by 1.77 times. When including all current assets (£105,804), the current ratio is 2.12, well above the standard 1.5 threshold for a healthy business.
• Working Capital: Net current assets (working capital) have grown from £36,514 in 2020 to £55,885 in 2025, indicating the business is generating more than enough cash from operations to fund its day-to-day activities.
• Payment Capability: The company has ample liquidity to service any new debt. A standard loan repayment would be a small fraction of its available cash.

4. Monitoring Points

While the outlook is positive, the following should be monitored:

• Director Concentration: Xxxxxx Xxxxxxxxname shown to subscribers is both the sole director and company secretary. The business's continuity is heavily dependent on him. Key-man insurance or a succession plan would be a positive mitigating factor.
• Debtors (Trade Receivables): Debtors stood at £17,213 in 2025, down from £19,248 in 2024. While this is manageable, we should monitor the debtor days ratio to ensure credit control remains effective and there is no build-up of bad debts.
• Profitability (P&L): The filed accounts do not include a Profit & Loss account. We need to request this to confirm the source of the retained earnings growth (i.e., is it from core operations or one-off items?). The increase in net assets suggests strong underlying profitability.
• Capitalised Development Costs: The company has capitalised intangible assets (development costs) of £19,070. We need to ensure these are amortised appropriately and represent genuine, commercially viable software assets, not just capitalised overheads.
• Provisions for Liabilities: A provision of £2,191 has been created, likely for deferred tax. We should confirm the nature of this provision and ensure it is not a recurring operational liability.

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