IP is key to the UK economy, Philip Hammond, the Chancellor of the Exchequer, said in his Budget speech, delivered on Monday, 29 October, 2018. He stressed IP's value in improving the country's productivity, and announced plans to help SMEs use their intellectual property as collateral to raise funds.
Mr Hammond said: “The Intellectual Property Office will support more companies to use their intellectual property to access finance, piloting a new offer to help businesses secure valuations, and will work with banks to improve their awareness of the opportunities and true credit risk associated with such lending.”
As further evidence that IP is key to the UK economy, as Mr Hammond's delivered his Budget speech, the British Business Bank released a paper, Using Intellectual Property to Access Growth Funding, exploring the opportunities and challenges around IP-based growth debt financing, especially for SMEs.
The report draws attention to the fact that intangible investment has in the medium-term grown faster than tangible investment, while warning that SMEs which are heavily investing in intangibles can struggle to raise debt funding.
Importantly, this report also highlights the BBB’s data on its Enterprise Finance Guarantee product since 2009, which clearly shows a marked difference in the percentage of companies defaulting on loans between companies in general and IP-rich ones in particular. The default rate was 16% for companies in general, but only 10% for ones with IP rights. A similar pattern was observed for loss rates, which halved from 8% to 4%. This makes it clear how IP can add value to companies.
Inngot is working closely with the BBB and with banks and insurance companies to develop evidence to help funders and advisors understand the correlation between IP and potential loss rates, using its IP knowledge and its web-based IP identification and valuation tools for SMEs.
Inngot offers a suite of online tools to help innovative businesses identify, manage and value Intellectual Property and intangible assets. In addition to its IP valuation tools, it contributes to the international debate on how best to help SMEs in particular uncover and leverage the value locked up in their IP and intangible assets and offers bespoke IP valuation and technology valuation services.