Credit Analysis: WHOLISTIC CARE AND SUPPORTED LIVING LIMITED

1. Credit Opinion: DECLINE

Reasoning: This company presents an unacceptable credit risk profile. The balance sheet is deeply insolvent with net liabilities of £261,208 (YE March 2025), having deteriorated by approximately £275,000 over just two years from a positive position of £13,863 in 2023. Current assets are negative at -£15,876, indicating the company likely has overdrawn bank facilities or severe cash flow problems. There is no reasonable prospect of debt service capacity under these conditions.

2. Financial Strength: CRITICAL

The balance sheet trajectory tells a stark story:

Key observations: - Technical insolvency: Shareholders' funds are negative £261,208. The company has no equity cushion and is entirely dependent on creditor support to continue trading. - Minimal capital base: Only £2 in issued share capital. The proprietors have not invested meaningful equity into the business. - Long-term creditors of £238,923: This represents a significant obligation due after one year. Given the micro-entity size and nature of the business, this is likely director loans or related-party financing. The accounts provide no breakdown or confirmation. - Negative current assets: At -£15,876, this is a red flag. Current assets should never be negative — this typically indicates an overdrawn bank position or misclassification. The company has £28,695 in net current liabilities, meaning it cannot cover short-term obligations from current resources. - Fixed assets declining: Down from £7,898 to £6,410, suggesting depreciation without replacement investment.

The company is trading while insolvent and is only sustained by creditor forbearance (likely the directors themselves).

3. Cash Flow Assessment: SEVERELY IMPAIRED

Liquidity position: - Net current liabilities: £28,695 (negative working capital) - Current assets are negative — there is no liquidity buffer whatsoever - The company cannot meet its short-term obligations from existing resources without additional borrowing or director support

Working capital concerns: - Creditors due within one year: £12,819 - No cash or liquid assets visible to service these - The business appears to be operating hand-to-mouth, reliant on cash flow from operations to meet day-to-day obligations

Debt service capacity: Non-existent. With negative net assets and negative current assets, the company has no capacity to take on additional debt obligations. Any new lending would be entirely unsecured and unrecoverable.

4. Monitoring Points

If any existing exposure exists, the following should be watched urgently:

1. Viability as a going concern: The directors have filed accounts without a going concern qualification, but the balance sheet strongly suggests material uncertainty about continuation.
2. Nature of long-term creditors: Clarification is needed on whether the £238,923 represents director loans, and whether these are subordinated or could be called.
3. Cash flow sustainability: Monthly management accounts should be requested to assess whether trading cash flows are sufficient to cover operating costs.
4. Regulatory risk: Operating in the care sector (SIC 86900) requires CQC registration and compliance. Any regulatory issues could halt operations entirely.
5. Director withdrawals: Monitor whether directors are extracting funds despite the insolvent position, which could constitute wrongful trading.
6. Filing compliance: Currently up to date, but any deterioration in filing timeliness would signal worsening governance.

Additional Context: - The company has rebranded twice (EKD Investments → Wholistic Care Professionals → Wholistic Care and Supported Living), which may indicate strategic pivots or attempts to distance from the previous financial position. - 15 employees suggests operational activity, but the financial position raises questions about whether wage obligations can be consistently met. - No director disqualifications found, but the financial stewardship evidenced by the rapid deterioration from a net asset position to £261k deficit is deeply concerning.