Support for IP finance starts to snowball

Photo by benjamin lehman on Unsplash

Inngot CEO Martin Brassell recently posted on LinkedIn about three major signals that show how IP backed finance is gaining traction with UK government and regulators. See the article below:

Baby, it’s cold outside (at least, in the UK!) – but things are hotting up in the IP finance world. Towards the end of 2025, three major announcements appeared referencing the financing gap for IP-rich scale-up firms; two from the UK Government and one from a senior Bank of England official.

In addition to Inngot's work with World Intellectual Property Organization – WIPO, ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD) and others on leveraging intangibles for finance, I sit on the Intellectual Property Office UK IP Finance Advisory Group, alongside some of the UK banks that are most actively engaged with IP as an asset class. In the autumn, I was also privileged to be one of the industry representatives giving evidence to the Business and Trade Select Committee, alongside the The Chartered Institute of Patent Attorneys. So I’ve taken the liberty of adding a few thoughts below.

Entrepreneurship encouragement

The first announcement was in the Entrepreneurship Prospectus (https://www.gov.uk/government/publications/entrepreneurship-in-the-uk) published alongside the November budget, which contained a range of measures aimed at addressing funding gaps. It recognised that while some businesses will always need equity backing, “debt finance is an important complementary funding source and potential alternative for entrepreneurs as they scale their businesses.”

The document picked up on the references to IP and its potential for use as collateral to raise finance included in the Government’s document, The UK’s Modern Industrial Strategy, launched last summer, which included the establishment of a cross-governmental working group, and took them forward: “To further support the provision of debt funding to the wave of new innovative businesses that lack physical assets, the government has asked the [British Business] Bank to explore using its existing financial guarantee capacity to support IP-backed lending”.

This is not a firm commitment (at least, not yet), but we know guarantees offer an attractive way to encourage the experiments required to secure the data needed for deeper structural change. And the next publication included the welcome news of the Growth Guarantee Scheme being put on a longer-term footing and an additional £3bn of capacity added to the ENABLE programme.

Challenges and opportunities

This news was in the response to the recent call for evidence on access to finance (https://www.gov.uk/government/calls-for-evidence/small-business-access-to-finance/outcome/government-response-to-access-to-finance-call-for-evidence), which also specifically talked about IP finance.

“In light of feedback on lending against intangible assets, the government is working closely with industry, financial institutions, and regulators on how best to support lending to innovative and high-growth intellectual property-rich (IP) SMEs. This autumn, a newly established cross-government working group and the Intellectual Property Office’s (IPO) industry IP Finance Advisory Group have been exploring measures to improve lending.”

In more detail, it acknowledged that currently, “mainstream lending practices are typically unable to account for the value of IP as collateral, such as copyright, patents or trademarks, when making their lending decisions... Information asymmetries contribute to smaller intangible-intensive businesses finding it harder and more costly to borrow than businesses with a sufficient pool of tangible assets.”

The response went on to highlight a number of positive developments, referencing NatWest Group's new IP growth loan (Andy Gray was one of those giving evidence) and the recent reforms to Scottish law on security interests that will make it easier to take security over IP (and other non-corporeal assets) in Scotland. Policy solutions it referenced included leveraging British Business Bank loan guarantee structures, reviewing the capital treatment of IP assets (including proposals for a sandbox approach), steps to improve confidence and consistency in IP valuation for lending purposes, and action to better support SMEs to identify and protect their IP.

No-one thinks IP finance is a silver bullet that will solve the UK’s growth and productivity challenges. However, these statements reflect a growing appreciation that scale-up firms are under-funded; that security is important to help banks lend more, but that few scale-up businesses own the kind of security that regulatory rules prefer; and that the asset class of greatest value that could be harnessed in addressing this challenge is intellectual property.

Regulator viewpoint

The Prudential Regulation Authority (PRA) works closely with HM Treasury and the Bank of England in implementing measures to keep banks safe. Many of these measures are set out in international agreements such as Basel III, which does not provide any capital relief against intangible assets taken as security – making banks less willing to lend against them, and directly adding to lending costs.

This dimension makes some of the recent comments made by Nathanaël Benjamin of the Bank of England on financing for high-growth firms particularly interesting (Benjamin is the BoE’s Executive Director for Financial Stability Strategy and Risk and a member of the Financial Policy Committee (FPC), the UK’s ‘macroprudential’ authority). He noted in a speech delivered in December 2025, titled Removing Frictions (https://www.bankofengland.co.uk/speech/2025/december/nathanael-benjamin-speech-at-womble-bond-dickinson), that:

“Many high-growth firms face difficulties in finding assets that lenders want as collateral on which to secure lending. The assets that they often do have, for example intellectual property, are not commonly accepted as collateral due to valuation difficulties, the lack of standardised frameworks for assessing IP risk, and recovery constraints that banks face in case of default.”

In discussing research and policy solutions, Benjamin went on to observe that these should include

“work to better understand impediments to lending backed by intellectual property (IP), such as a lack of information to value and assess an IP’s value as collateral that will be increasingly needed as the intangible knowledge economy becomes an even more important part of UK growth”.

Whatever 2026 holds in policy support terms, we at Inngot are going to keep on doing our thing – working with banks to help them build cost-effective ways of leveraging IP as security, so that they can lend more to those firms that can use the cash to invest most productively.