New lending option for IP-rich businesses launched
NatWest Group has introduced a new option for IP-rich businesses, which allows them to leverage intellectual property value to access funding.
This new proposition means that it is possible for businesses which have few tangible assets to use their IP as collateral for borrowing.
A lack of collateral in the form of physical assets can result in decreased access to funding which can support growth.
The lending proposition introduces a new option for high-growth businesses which may not otherwise meet traditional lending requirements.
At present, a lack of recourse to traditional funding options means that there is a funding gap for high-growth businesses, which may add up to as much as £15 billion annually.
NatWest Group intends to work with IP valuation firm Inngot to evaluate non-tangible assets which could be used as loan security, potentially helping to plug some of this shortfall.
However, NatWest will continue to assess applications based on standard collateral options in the first instance – non-tangible asset options will be used if the standard tangible options are insufficient.
The focus on businesses which have more non-tangible assets means that this proposition will likely be of greater benefit to startups, defined as businesses growing by more than 20% per year.
In 2023, the UK’s 28,410 startups generated a total turnover of £1.3 trillion.
CIPA will host a free webinar on this topic on 18th March, which CITMA members are invited to attend. If you wish to join the webinar, please email [email protected] to book.