IP: providing lenders with the security you’ve been missing.
Intangibles: the future of secured lending
UK businesses now invest 30% more in intangible assets than in tangible ones. The nature of ‘good’ security is changing – and Inngot can help you to benefit.
Since the Victorian age, secured lending - finance backed by fixed assets - has helped to fuel the growth of UK companies. However, 21st century businesses have different needs, and produce value in new ways – often by using their knowledge to build up intangible rather than tangible assets. Since these seldom appear on the balance sheet, good companies can end up with a security shortfall.
This fundamental shift is prompting new approaches to secured lending, which Inngot is uniquely placed to support. Our online systems help businesses locate and value all their relevant intangibles: once these are identified and recorded, each asset’s potential to be used as security for lending can be assessed and realised.
Why use IP for secured lending?
There are a number of reasons why intellectual property ('IP') and intangibles deserve serious consideration as security for lending:
- IP is central to a business’s activities, and so provides a strong repayment incentive: a company can’t trade without it.
- IP can be leveraged alongside other charges or guarantees .
- Including IP in the mix enables more marginal deals to be done, at appropriate pricing.
- Unlike most fixed assets, IP appreciates in value if properly managed.
- Taking security over the IP strengthens a lender’s position in the event of administration.
Even if you don’t need to use a company’s IP as security, assessing off-balance sheet value is an important aid to credit appraisal, and provides the comfort of understanding the underlying revenue drivers and general health of a business.
We’re already working with Lloyds TSB Commercial and Bank of Scotland to help their customers identify their intangible assets and assess whether these could be used as security. Call or email us to find out how can we help you.
Watch our short videos, below, to find out more on how IP can be valued and leveraged for business funding..