Help for IP-rich CBILS applicants

Martin Brassell, Chief Executive of Inngot, explains how we are taking steps to support UK SMEs in the current emergency

As a way to help companies facing funding difficulties in the current pandemic, and to promote better knowledge asset awareness, we've made a decision to offer our profiling and valuation tools free to UK companies applying for the Coronavirus Business Interruption Loan Scheme (CBILS) while the lockdown restrictions last.

Here's our thinking. As many will appreciate, CBILS is effectively the previous Enterprise Finance Guarantee Scheme with go-faster stripes. As such, it is designed to accommodate the fact that target companies may not be able to offer the type of collateral that banks traditionally require - so it's a good theoretical match with the characteristics of IP-rich companies.

Like EFG before it, CBILS does not absolve lenders of the need to lend responsibly. That is why we have been in discussion with a number of banks for a while about paying more attention to off-balance sheet assets, because these can help reveal what the underlying strength of a business is.

We have been helped in this by 2018 research published by the British Business Bank and UK IP office, confirming that losses associated with EFG applicants with registered IP run at half the level of those that don't.

For those not already familiar with them, our web tools are designed to clarify and describe the non-physical assets businesses own and place a value on them (the latest version of our 'Sollomon' tool uses three different income and cost approaches to calculate this). Once identified, these assets can also be taken as security - in place of the personal guarantees that make so little sense in the current climate.

At the moment, we understand that businesses are understandably finding it especially difficult to forecast with accuracy, especially in the short term (and our tools can make allowances for that). However, it's clear the companies that will survive and prosper will be the ones that have a sustainable and defensible competitive advantage. These firms can only be identified by analysing the range and value of their intangible assets, particularly their intellectual property. So that's what we do.

If you know a business that is applying for CBILS and has a story to tell about its IP and intangibles, just ask them to email CBILS@inngot.com. If they confirm which bank they are approaching under the scheme and provide their company name and contact details, we will send them a special code enabling free access to our system for a week.

You can reassure them that the process is driven by much the same financial information as a CBILS lender will request anyway. We may need a little more granularity over the business’s historical investments in innovation, but we don't ask for anything that wouldn't be found in historical and management accounts. The whole process involves about an hour of screen time in total, with provisional results produced instantly, which are then moderated by the Inngot team.

Clearly, we can't guarantee that our report will make the difference between getting a CBILS loan and not getting one. But companies that go through our process invariably gain new insights into the drivers of value within their business that they can use for a variety of purposes. So you can be confident it's time (at home) well spent.

For further details, see www.inngot.com/cbils