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Access to finance is crucial for scale-ups looking to fuel their growth and innovation. However, traditional secured financing options often come with requirements which can include personal guarantees from business owners. In the absence of sufficient company tangible assets for security these PGs can be backed by a home so this can be a deterrent for many entrepreneurs who want to protect their personal assets.
However, with support from Inngot, NatWest is now offering a ground breaking solution – IP-backed loans for scale-ups. Growth businesses without tangible assets to offer as security but with valuable intangibles can raise finance without the need for personal guarantees, thanks to the NatWest IP product which is backed by our proprietary software that identifies, values, and assesses intellectual property (IP) assets for use as collateral.
A new era in scale-up finance
Traditionally, securing finance for scale ups has been challenging if they don’t have tangible assets to as security such as buildings, vehicles and equipment. This model is no longer suitable for 21st century businesses where the value in most companies lies in their IP and intangible assets. This means that directors either lose out on accessing vital finance to scale and grow, or take personal risks.
With IP-backed loans, scale-ups can now access the capital they need by leveraging valuable IP assets, including patents, trademarks, copyrights, and trade secrets, to secure the funding they need.
The power of Inngot’s software
Our software enables businesses to comprehensively identify and value their IP assets, providing detailed reports that form the IP basis for NatWest’s IP-backed loans. By leveraging advanced algorithms and data-driven analysis, our software ensures accurate valuation and assessment of IP assets, giving NatWest confidence in using companies’ IP as collateral.
Key benefits of IP-backed loans
The IP-backed loan package offered in partnership with NatWest brings several key benefits for scale-ups:
- No personal guarantees
One of the most significant advantages of IP-backed loans is that they eliminate the need for personal guarantees. Business owners can secure financing using their IP as collateral without the need to put personal assets on the line, providing peace of mind and a sense of financial security.
- Repayment holiday
Another valuable feature of the loan package is the ability to have a repayment holiday at the beginning of the loan term (please note this is at NatWest’s discretion and depends on the specific circumstances). This allows businesses to focus on growth and investment during the crucial early stages, without the immediate burden of monthly capital repayments.
- Access to capital for growth
By unlocking the value of their IP assets, scale-ups gain access to much-needed capital for various growth initiatives. Whether it’s expanding into new markets, investing further in research and development, or hiring top talent, IP-backed loans provide the necessary funds to propel businesses forward.
- Retaining ownership and control
Scale-ups can maintain ownership and control over their intellectual property while utilising it as collateral. This means that as the business grows and succeeds, it retains ownership in the IP, the value of which could potentially increase significantly. Of course, if the company fails to keep up repayments on its loan, it could lose control of the IP it pledged as collateral. Pure debt funding like this is non-dilutive for company owners as they are not selling more equity to raise funds – so they retain greater control.
- Potentially access more funds in the future for growth during the loan period
If the value of the IP which a company has used as collateral increases – and it should, if the company is investing in R&D and exploiting its IP properly – then there is the possibility that when the IP is revalued, it may unlock more finance from NatWest down the line and help to propel the business further.
Empowering Scale-Ups for Success
The collaboration between Inngot and NatWest represents a significant milestone in scale-up finance. By offering IP-backed loans without the need for personal guarantees, we are empowering entrepreneurs and scale ups to drive innovation and growth. Our software-driven approach ensures accurate valuation and assessment of IP assets, allowing businesses to leverage this untapped potential for financing without giving up some of their future returns by selling more equity – and without putting their homes at risk!
With Inngot’s expertise in IP valuation and NatWest’s commitment to supporting growth businesses, together we are transforming the financing landscape for scale-ups. By raising business finance without personal guarantees, scale-ups now have more freedom to innovate, expand, and thrive in an increasingly competitive market.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial or legal advice. It is recommended to consult with your professional advisors, as well as representatives from NatWest, before making any financial decisions.
