Definitions

Insolvency Terminology

• Administration: A formal insolvency procedure where a licensed insolvency practitioner is appointed to manage a company with the aim of rescuing it as a going concern, achieving a better result for creditors than immediate liquidation, or realising assets to make a distribution.
• CVA (Company Voluntary Arrangement): A legally binding agreement between a company and its creditors to repay debts over an agreed period while the company continues to trade. Supervised by a licensed insolvency practitioner.
• Admin / CVA: A combined reporting category used in Spark Intel reports to group administrations and CVAs — the most complex formal insolvency proceedings where a practitioner actively manages the company's affairs.
• MVL (Members' Voluntary Liquidation): A solvent company wind-down where the directors resolve to liquidate the company and distribute remaining assets to shareholders. MVLs are not a sign of financial distress.
• CVL (Creditors' Voluntary Liquidation): An insolvent liquidation initiated by the company's directors and approved by shareholders and creditors. The company ceases trading and its assets are realised to pay creditors.
• Compulsory Liquidation: A court-ordered winding-up of a company, typically following a petition by a creditor. An Official Receiver or insolvency practitioner is appointed to realise assets and distribute proceeds.
• Insolvency Practitioner (IP): A licensed professional authorised to act on insolvency appointments. IPs are regulated by one of several recognised professional bodies in the UK.
• SPK Index: A proprietary algorithm managed by Spark that ranks insolvency practitioners and firms based on a weighted combination of appointment volume, case complexity (by company size), and appointment type. See Methodology for further detail.
• Appointment: A formal filing at Companies House recording the assignment of a licensed insolvency practitioner to a particular company proceeding. One company may have multiple appointments across different proceeding types.

Invoice Finance Terminology

• IF Charges: Spark's classification for what qualifies as an invoice finance charge, based on either the charge name, or a combination of the name and the nature of the charge registered at Companies House.
• Charge Registration: A legal filing at Companies House that records a security interest (debenture) over a company's assets, typically created when a lending facility is put in place. Used as a proxy for new invoice finance facility activity.
• Debenture: A document that creates a charge or security interest over a company's assets, often covering book debts, stock, and other movable property. In the context of invoice finance, a debenture secures the lender's interest in the company's receivables.
• Debtor Book: The total value of outstanding trade receivables (money owed to a business by its customers). The debtor book is the primary asset against which invoice finance facilities are secured.
• Refactors: Invoice finance charges where a previous IF charge was satisfied within 100 days of the new charge, or was left open. Indicates a company switching between invoice finance providers rather than taking on a new facility.
• Spark Size: A prediction of the size of the commercial opportunity — this is not the credit risk pertaining to the business, but the potential revenue generation from the invoice finance facility.
• Advance Rate: The percentage of the invoice value that a lender will advance to the client upfront. Typically 80—90% for invoice finance facilities.
• Service Fee: An ongoing fee charged by the invoice finance provider, typically expressed as a percentage of annual turnover, covering the cost of administering the facility.
• Discount Charge: Interest charged on the funds advanced against invoices, typically calculated on a daily basis against the outstanding balance. Usually expressed as a percentage above a base rate.

UK Lending Terminology

• SME (Small and Medium-sized Enterprise): A business with fewer than 250 employees and either annual turnover not exceeding €50 million or an annual balance sheet total not exceeding €43 million, as defined under EU/UK guidelines.
• Charge (UK Lending context): A security interest registered at Companies House by a lender over a borrower's assets. Charges serve as a proxy indicator for lending activity across all finance types.
• Asset Finance: A lending product where a business borrows against or acquires equipment, vehicles, or machinery through hire purchase, finance lease, or operating lease arrangements.
• Bridging Finance: Short-term secured lending used to bridge a gap in funding, typically against property or land, while longer-term finance is arranged or an asset is sold.
• DSCR (Debt Service Coverage Ratio): A financial ratio measuring a company's ability to service its debt obligations from operating income. Calculated as net operating income divided by total debt service.
• LTV (Loan-to-Value): The ratio of a loan amount to the value of the asset being financed, expressed as a percentage. A key metric in secured lending for assessing lender exposure.

General Reporting Terms

• Region: Spark sales regions, allocated based on either HMRC or Companies House registered address. Used for geographic segmentation across all report types.
• SIC Code (Standard Industrial Classification): A standardised system for classifying business activities by sector. Used in Spark Intel reports to categorise companies by industry. Based on the SIC code filed at Companies House.
• YoY (Year-on-Year): A comparison between the same period in consecutive years. Used in monthly and annual reports to measure growth or decline relative to the equivalent prior-year period.
• MoM (Month-on-Month): A comparison between consecutive months within the same year. Used in monthly reports to show short-term trends.
• Cumulative: A running total from the start of the calendar year to the current reporting period. Used alongside monthly figures to show year-to-date progress.
• Companies House: The official UK government register of companies. The primary data source for Spark Intel research, providing company filings, charge registrations, insolvency records, and corporate metadata.
• Open Government Licence (OGL): The licence under which public sector information from Companies House and other government sources is made available for reuse. Spark Intel's use of this data is licensed under OGL v3.0.

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