Intellectual Pursuits

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A United Nations agency report launched in London last week has revealed that UK banks are beginning to engage more with Intellectual Property (IP) backed lending.

The report said that new IP-backed loan products, such as those recently launched by UK banks NatWest and HSBC, show that new IP-backed financing options are emerging in the UK to help businesses scale and grow. This follows earlier research which found that firms with registered IP may make better lending candidates.

In a joint collaboration between the World Intellectual Property Org (WIPO) and the UK’s Intellectual Property Office (IPO), the report’s launch event marked another step in WIPO’s work programme to help improve policy and industry insight into the viability and practices of IP finance globally. The UK report contributes to a growing body of evidence on the opportunities and challenges in moving IP finance into the mainstream.

Overall, IP-intensive industries account for more than a quarter of UK output – around £300 billion a year. Intangible assets – often protected by IP – may make-up around 70-80% of a typical firm’s value.

The report recognises that the UK meets the“essential preconditions”for IP-backed finance to work at scale: a strong IP regime, a pool of innovative firms, and a vibrant financial sector. However, while there are positive developments, the report notes there is much further to go to move IP financing from the margins to the mainstream, and highlights several challenges to firms using IP to raise growth funding, including low levels of awareness among financiers and industry, a lack of secondary markets for IP assets, confidence in IP valuation, and limited visibility of IP in business reporting.

The launch event saw the UK’s Minister for AI and IP, Viscount Camrose, also announced that the UK Intellectual Property Office (IPO) will act to raise the profile of IP financing and identify avenues to improve investment into IP-intensive firms by:

• establishing an advisory working group to bring together experts from the financial sector, IP profession, and academia to help shape policy in this globally developing area of business finance.
• bringing together, in an annual report, a set of regular and consistent metrics to improve market insight into using IP to access equity and debt finance.
• looking into avenues to improve the process of recording charges against registered IP before the IPO.

IPO-related businesses are the lifeblood of the UK economy and are instrumental in supporting growth. At Paul Beare we work with a huge range of IP-dependent companies at varying stages of growth and maturity. So, if you’re starting up a business and need the help of expert accountancy help, then we can cover off all you need. You can contact us for help from tax and payroll to accounting and banking.