Credit Analysis: Support Solutions (UK) Ltd

1. Credit Opinion: CONDITIONAL

The company presents a compelling turnaround story but with insufficient financial disclosure to grant unqualified approval. Shareholders' funds have recovered from negative £43,102 (2021) to positive £160,919 (2025), demonstrating genuine rehabilitation. However, micro-entity filing requirements severely limit visibility into trading performance, profitability, and cash composition. Any credit facility should be conditional upon provision of management accounts and appropriate covenants.

2. Financial Strength

Balance Sheet Trajectory – Significant Improvement

The company has engineered a substantial recovery from technical insolvency. Net worth has improved by approximately £204,000 over four years, indicating retained profitability and/or capital injection.

Current Position (April 2025): - Total assets: £308,648 - Total liabilities: £146,381 - Net assets: £160,919 - Net current assets: £161,848 - Current ratio: approximately 2.1x

The balance sheet is now appropriately capitalised with liabilities representing roughly 47% of total assets. However, fixed assets are negligible at £1,321, meaning the business is essentially asset-light with almost all value in current assets. This provides limited tangible security for lenders.

Concern: Total assets declined by £17,616 year-on-year (2024: £326,264 → 2025: £308,648), whilst creditors also reduced by £32,462. This may indicate debtor settlement or asset reallocation rather than trading deterioration, but confirmation is required.

3. Cash Flow Assessment

Liquidity Position: - Current assets: £307,327 (excluding prepayments) - Current liabilities: £146,381 - Working capital: £161,848

The current ratio of 2.1x is healthy and indicates adequate short-term liquidity. Creditors falling due within one year have reduced from £178,843 to £146,381, suggesting the company is actively managing payables.

Critical Data Gap: Micro-entity accounts provide no breakdown of current assets between cash, trade debtors, and other recoverables. The composition is vital: - If predominantly cash: strong liquidity - If predominantly trade debtors: collection risk and potential bad debts

Without a profit & loss account, we cannot assess operating cash generation, interest coverage, or debt service capability directly.

Historical Cash Context: In 2017-2018 (last years with cash disclosure), cash ranged from £22,201 to £69,920 against similar-sized balance sheets, suggesting the business historically carried reasonable liquidity.

4. Monitoring Points

Immediate Requirements: 1. Management accounts – Request quarterly or monthly management accounts showing turnover, gross margin, net profit, and aged debtor/creditor schedules 2. Cash position confirmation – Establish current cash balance and composition of current assets 3. Debtor quality – Obtain top-10 customer analysis and ageing profile; service businesses carry concentration risk 4. Creditor reduction explanation – Clarify whether the £32,462 reduction in creditors reflects improved cash flow, reduced trading, or specific settlements

Ongoing Covenants: - Minimum net worth covenant of £140,000 - Current ratio maintenance above 1.5x - Debt service coverage ratio (once determined from management accounts) - Timely filing of annual accounts

Watch Points: - Continued trajectory of net asset growth - Any return to creditor accumulation - Director withdrawals or related-party transactions - Concentration of revenue in few clients (typical for small service businesses) - The slight asset decline in 2025 warrants monitoring to confirm it does not represent a trend