IVER CONSULTING LIMITED

Credit Analysis: Iver Consulting Limited

1. Credit Opinion: CONDITIONAL APPROVE

Reasoning: Iver Consulting Limited is a long-established, debt-free micro-entity with a strong cash position and a consistent, albeit modest, profitability track record. The core business appears sound, and the company has historically met its obligations. However, the declining trend in net assets and cash over the last two years, coupled with a significant reliance on director loans for financing, warrants a cautious approach. Credit is approved on the condition that the facility is modest, unsecured, and with a clear understanding of the directors' ongoing financial support. This is not a candidate for a large, unsecured overdraft.

2. Financial Strength: Declining but Healthy

• Balance Sheet Health: The company has a simple, clean balance sheet with no long-term debt. Net assets (Shareholders' Funds) have decreased from £26,873 in 2023 to £20,291 in 2024. While still positive, this represents a 24% decline year-on-year and a significant drop from the peak of £103,712 in 2018. The company has been distributing profits, likely through director remuneration and dividends, which has eroded equity.
• Capital Structure: The company is financed almost entirely through retained earnings and director loans (£19,062 in total for H & R Xxxxxxxname shown to subscribers as of 2024). This is a key vulnerability. The director loans are repayable on demand, presenting a contingent liquidity risk. The company's net worth is only marginally higher than the amount owed to its directors.
• Asset Base: The company is asset-light. Fixed assets (computer equipment) are negligible at £1,113. The primary asset is cash. There are no substantial physical assets to offer as security.

3. Cash Flow Assessment: Adequate but Tightening

• Liquidity: The company's cash position is its primary strength. Cash at bank of £45,647 covers current liabilities of £35,671 by a factor of 1.28x. This is a reasonable but not strong current ratio. The decline from £60,605 in 2023 is a negative signal.
• Working Capital: Net Current Assets (working capital) have decreased from £25,461 to £19,178. This is due to a £14,958 drop in cash, partially offset by a £8,899 reduction in creditors. The company is effectively using its cash to pay down its liabilities, which includes director loans.
• Profitability: While the Income Statement is not provided, the change in retained earnings implies a modest profit for 2024 (profit of approximately £20,281 - £26,863 = -£6,582, which after accounting for dividends/drawings, suggests a low or modest profit). This is consistent with a lifestyle business. The key risk is that the business is generating minimal surplus cash after paying the directors.

4. Monitoring Points

• Director Loan Balances: The level of loans from directors H & R Xxxxxxxname shown to subscribers must be closely monitored. Any indication of these being withdrawn would severely stress the company's liquidity. The facility agreement should require notification of any material change to these balances.
• Cash Conversion Cycle: Track the cash balance and trade debtors. The appearance of £6,162 in trade debtors in 2024 (from £0 in 2023) is a new development. This should be monitored for ageing and collection performance.
• Profitability Trend: Request management accounts to assess whether the company is generating sufficient profit to sustain its operations and service a new credit facility without relying on director support.
• Dividend Policy: Any significant dividend payments or director drawings that materially reduce the cash balance or net assets should be flagged.

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