IP-backed lending is now available in the UK - but what does it mean for innovative SMEs?

Photo by micheile henderson on Unsplash

For years, UK businesses have been told that their most valuable assets are the ones you can’t touch – intellectual property, data, know-how and brand. Yet when those same businesses approached lenders, these ‘invisible’ assets rarely counted for much.

That mismatch between economic value and financial recognition has long been one of the biggest barriers to innovation finance.

Today, however, there is growing recognition in the UK that IP-backed lending is not only possible but essential for a modern, innovation-led economy. IP finance is finally moving from concept to reality.

Intangible assets and the SME funding gap

Intangible assets now make up 70-80%of corporate value across the UK economy, according to the UK Intellectual Property Office. For many innovative firms – especially in technology, life sciences and creative industries – IP may represent even more – as high as 90%.

Yet traditional finance and accounting models were built for a 19th century industrial economy that valued machinery, stock and property, not ideas.

Today, though, this focus on tangible assets means innovative, 21st century, companies, with value driven largely by patents and data, has led to an increasing funding gap for innovative, IP-rich SMEs.

Banks have historically failed to recognise the contribution of intangible assets to a company because they were unable to incorporate them into their asset visibility, data and risk frameworks. Indee, bankers are still told in their training that they should ignore IP as an asset class because it’s ‘too difficult’.

For SMEs, this meant innovation value was often locked out of the credit system used by lenders.

Inngot was founded to close that gap – to make intangible value visible, measurable and financeable.

Policy momentum: the UK’s IP-finance push

But now, government, regulators and banks have begun to focus seriously on the potential of IP-based finance to fill the innovation funding gap.

The UK IPO, in partnership with the World Intellectual Property Organisation (WIPO), co-published The United Kingdom’s Journey in WIPO’s “Unlocking IP-backed Financing Series” in January 2024, providing an overview of the IP finance landscape in the UK.

Since then, the UKIPO has established an IP Finance Advisory Group of experts to coordinate efforts between banks, policy-makers and IP advisors. Even more important, in its Modern Industrial Strategy, published in June 2025, the Labour Government committed to driving the development of IP-backed finance by pledging to:

“Tackle specific barriers for IP-rich sectors, working with the Intellectual Property Office to explore how to help businesses raise debt finance”

These steps have built market confidence, with the promise of new standards for valuing IP and new financial infrastructures, both of which will allow  IP-based finance to scale. The UK’s approach is now viewed among the most advanced globally, complementing efforts in Singapore, South Korea and Japan.

For UK lenders and SMEs alike the message is clear: IP is moving from a peripheral concern to a central part of the UK’s finance strategy.

Banks are testing the waters

Even before these developments, forward-thinking banks were exploring how to integrate IP valuation into their credit models.

Perhaps the most obvious example is the partnership between NatWest Group and Inngot, which led to the launch of NatWest’s High Growth IP-backed Loan proposition, the first SME-targeted loan where a bank could actually take IP as collateral for lending. That launched in January 2025, underpinned by Inngot’s world-leading online IP toolkit which allowed client and lender to focus on how intangible assets contribute to business value and resilience.

These collaborations show that IP can be assessed and incorporated into lending without adding undue complexity or risk. Rather than replacing traditional credit metrics, IP insight enhances them – offering a more complete picture of a borrower’s true worth and growth potential.

For lenders, this means the opportunity to back more innovation-rich businesses with confidence. For SMEs, it opens the door to a fairer assessment of their real assets.

How Inngot is enabling wider adoption of ip-backed lending

IP-backed lending is no longer in the ‘promising but difficult’ class. The core obstacles have already been solved, largely via technology and standards developed by Inngot.

Historically, the absence of consistent data, comparable valuation approaches and lender confidence prevented intangibles being accepted as collateral. Inngot’s software platform addresses these challenges by delivering standardised, evidence-based IP identification and valuation frameworks, which can be integrated directly into financial institutions’ underwriting and risk systems.

Through partnerships with major lenders including NatWest and HSBC, Inngot has enabled banks to:

• Identify and categorise IP and intangible assets systematically across portfolios.

• Produce transparent valuations using recognised methodologies.

• Combine IP insight with conventional financial data for balanced credit decisions.

By evolving this from a one-off specialist assessment into a repeatable, scalable process, Inngot gives lenders the confidence, auditability and compliance tools they need to participate in this emerging asset class, and lend at scale to today’s IP-rich companies

In short, IP-backed lending is no longer theoretical – it’s operational, and already happening in the UK.

Why 2025 Could Is a Turning Point

A series of converging trends means IP finance is poised for even more mainstream adoption.

• Policy alignment: The UK IPO’s continued leadership and government support are creating the right environment for lenders to experiment safely.

• Technology maturity: IP  valuation and benchmark data now allow more accurate, consistent assessments using Inngot software.

• Market demand: As more businesses become asset-light but innovation-rich, lenders must evolve to remain relevant.

• Proven success: Early pilots with Inngot’s technology are showing tangible results and confidence is spreading.

Taken together, these factors make 2025 the year when IP finance shifts from niche innovation to a viable component of the UK SME lending landscape.

What innovative SMEs should do now

For ambitious SMEs the implications are immediate and positive. Access to growth-finance no longer depends solely on tangible assets or personal guarantees – but to take advantage, businesses need to prepare.

Here’s how:

1. Identify your IP: Map all forms of intellectual property – patents, trademarks, designs, copyright, trade secrets, data and know-how – and ensure ownership is clearly documented.

2. Value it properly: Use recognised, transparent methodologies (such as those within Inngot’s platform) to establish indicative values and evidence your intangible strength.

3. Integrate IP into your financial story: Show how your IP underpins your revenue, margins and market position. Lenders increasingly expect this link to be clearly articulated.

4. Maintain good IP governance: Keep your IP register current, renew rights on time and record licences or assignments properly. Strong governance means lower risk.

5. Trade secrets: make sure you follow all recommended procedures to keep them secret; trade secrets can protect your processes and even data forever, but only if they stay secret.

6. Engage with IP-aware lenders: Seek finance partners who recognise intangible value and understand how to interpret IP insight in context.

By treating your IP as strategic business capital rather than as an after-thought, you can unlock finance on better terms and accelerate innovation-led growth.

The Future of IP-backed finance in the UK

The UK has long been a global leader in intellectual property and innovation. Now it has the opportunity to lead in IP-based finance as well. With government backing, lender engagement and proven tools already in place, the foundations are strong.

Inngot’s mission has always been to make intangible value visible – ensuring that great ideas, protected and proven, can attract the capital they deserve. As more banks adopt structured approaches to IP assessment and confidence builds through data and experience, the market for IP-backed lending will continue to mature.

For SMEs, investors and lenders alike, this is the start of a new era: one where the value of ideas is recognised on balance sheets – and used to fuel the next generation of UK growth.