SP MORTGAGES LTD

Executive Summary

SP Mortgages Ltd exhibits early-stage financial improvement with positive net assets and compliance with statutory filings, but carries notable director loan liabilities and limited cash reserves. The company’s small scale and limited operating history introduce moderate risk regarding solvency and liquidity. Further scrutiny of director loan arrangements and cash flow dynamics is advised to fully assess financial stability.

SP MORTGAGES LTD - Analysis Report

Company Number: 13161160

Analysis Date: 2025-07-29 20:50 UTC

1. Risk Rating: MEDIUM
   SP Mortgages Ltd shows improving financial health over its short operating history, moving from net liabilities in 2023 to a modest positive net asset position in 2024. However, the company carries significant director loan liabilities and has limited cash reserves relative to these obligations, which presents some solvency and liquidity risks given its size and nature.

2. Key Concerns:

• Director Loan Liability: The company has a substantial director loan (£5,538) reported as a long-term creditor, which is a significant liability relative to total net assets (£507). This raises questions about ongoing funding and repayment plans.
• Limited Cash Position: Cash balances increased to £6,355 but remain low, potentially constraining operational flexibility and ability to meet short-term liabilities (£1,672 current creditors).
• Small Scale and Limited History: Incorporated in 2021 with only one employee and minimal share capital (£100), the company’s operational scale is small, which may impact stability and resilience to market fluctuations in mortgage finance.

3. Positive Indicators:

• Improved Net Assets: Transition from negative net assets (-£1,006 in 2023) to positive net assets (£507 in 2024) indicates financial improvement.
• Compliance with Filings: All statutory accounts and confirmation statements are filed on time with no overdue reports, indicating good regulatory compliance and governance practices.
• Clear Accounting Policies: Use of FRS 102 and small companies regime with transparent accounting policies provides reasonable assurance on financial reporting quality.

4. Due Diligence Notes:

• Investigate terms and conditions of the director loan, including interest, repayment schedule, and any covenants, to assess long-term solvency risks.
• Review cash flow statements to understand operational liquidity trends and sources of cash generation or reliance on director funding.
• Assess the company's business model sustainability and client base in the mortgage finance sector, considering its small scale and market conditions.
• Confirm no outstanding regulatory or compliance issues beyond filing status, particularly given the director’s sole control.