NatWest offers IP-backed loans for startups
Global bank changes lending strategy to address ‘funding gap’ faced by high-growth companies | Considers IP assets as collateral for loans.
NatWest has changed its lending approach to cater to the needs of IP-rich businesses.
The London-based bank has revealed plans to support high-growth businesses in response to the funding challenges businesses with minimal tangible assets face.
High-growth businesses, defined by their rapid expansion and innovation, often find it challenging to leverage their assets as collateral to secure growth funding, but can be rich in IP and intangible assets.
This growing discrepancy has given rise to a substantial funding gap estimated to be as high as £15 billion annually, said the bank.
While Natwest will continue its initial assessment of loan applications against “standard lending criteria”, it acknowledged that conventional security measures may not meet the borrowing needs of high-growth businesses.
In these cases, NatWest will consider using qualifying IP assets as collateral for loans.
IP assets as security for loans
NatWest has partnered with the specialist IP evaluation company Inngot. The collaboration will see Inngot providing valuations to identify and evaluate relevant IP assets that could potentially be used as security for loans.
Andy Gray, managing director of commercial mid-market at NatWest Group, was “delighted” to have joined forces with Inngot and provide a “progressive proposition” for high-growth SMEs and scale-up businesses.
“Many of these businesses struggle to access debt funding when they need it without having to dilute equity. This new offering will allow these firms to go further and faster in their growth journey,” he added.
Martin Brassell, CEO of Inngot, highlighted that with this move NatWest is recognising that IP is a “vital component of value for growth companies.”
"There is massive potential to transform the prospects of some of our most exciting firms by enabling them to leverage the things that really drive their success,” Brassell continued.
The wider impact of scale-ups was demonstrated in the latest report from the ScaleUp Institute.
According to the report, in 2023 there were 28,410 scale-ups contributing £1.3 trillion to the economy and employing 2.6 million people.
Despite constituting only 0.5% of the SME population, these firms generated 58% of the turnover of all UK SMEs.
For more details, businesses can answer three questions and NatWest will provide taoilored content for their specific needs.
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