Inngot’s Martin Brassell examines the role of IP and intangible assets in facilitating business finance and explains why mainstream lenders should start taking IP seriously.
While most are pleased to see some green shoots of economic recovery finally starting to appear, concerns are also being voiced about this being the ‘wrong sort of growth’.
The increased activity that has been seen in the lending market appears to be centered on property – and we all know where that ended up last time!
Those in the IP profession might reflect that it is not the wrong sort of growth – just the wrong sort of property. Because, if a knowledgebased economy is the kind that most countries now want to build (and few, if any, appear to have a Plan B under the table), then something is going to have to be done to make the currency of that economy easier to trade and borrow against.
companies now spend more on building up their intangible assets than they do on fixed assets, like hardware and equipment. Equally, when businesses seek equity funding, it is usually the intangibles (especially IP) rather than any supposedly ‘hard’ assets, which drive investor appetite and price. The same applies when shares are sold.
So why is it so difficult for companies to use IP assets as security for debt funding, and are there any signs of hope? The recent Banking on IP? for the UK Intellectual Property Office has provided evidence to explain the former, and some pointers for the latter.