Building the Collateral Evidence Pack

What a credit committee actually reviews

When an adviser puts intangible assets forward as security, the credit committee is not assessing a story about value — it is testing whether each asset survives a specific set of questions. Does the borrower own it cleanly? Is it already pledged? What is it worth to a standard a valuer will defend? And if the loan fails, can it be realised for cash? A collateral evidence pack is the document that answers those questions asset by asset, so the committee can price risk rather than send the file back.

The pack is organised the way a lender reads it. Each named asset carries its own dossier — register entry, ownership and title evidence, encumbrance status, an IVS-aligned valuation, an evidence grade, a collateral-suitability rating, a realisation view — and the pack closes with a financials summary that shows how the debt is serviced. Get the sequence right and the committee spends its time deciding, not chasing.

The eight components, per asset

1. The intangible register

Start with a named-asset register: what the asset is, its type, when it was created or acquired, and its role in generating revenue. A register that lists "the brand" as one line is not a register — the committee needs each right, mark, patent, code base, dataset and key relationship identified individually so ownership and value can be tested against it. This is the spine the rest of the pack hangs from.

2. Ownership and title evidence

Lenders require clean, unencumbered title with a documented chain. The common failure is IP created by contractors or employees that was never formally assigned to the company — a gap that voids the security later. Registered rights carry more weight than unregistered ones, and every right relied upon must be in force, with renewals paid.

3. Encumbrance status

The pack must show searches at both Companies House and the UK IPO. A charge that is not registered at Companies House within 21 days is void against a liquidator or administrator under Section 859A of the Companies Act 2006, so the committee wants to see the encumbrance position confirmed, not assumed.

4. An IVS-aligned valuation

Value must be established to a credit standard, not a marketing one. That means IVS 210 for intangible assets, with the approach chosen to fit the asset — Relief-from-Royalty, MPEEM after contributory-asset charges, With-and-Without, or a Cost approach where income cannot be isolated. For collateral, RICS guidance directs the valuer to a downside premise: an orderly-liquidation or forced-sale view, conservative inputs, and ranges with sensitivity rather than a single "most likely" number that hides the low end.

5. L0–L4 evidence grading

Two assets can carry the same headline valuation and be worth very different things to a lender, because the evidence behind them differs. Grading each asset from L0 to L4 tells the committee how well-substantiated the claim is — from an unsupported assertion up to auditor-grade, independently corroborated evidence — so it can weight the number accordingly rather than take it at face value.

6. Collateral-suitability rating

Suitability is assessed against the three tests a lender applies to any intangible:

• Separability — can the asset be sold or licensed apart from the business, or is it inseparable from the going concern?
• Saleability — is there a market of realistic buyers or licensees who would pay for it in a disposal?
• Legal strength — is the right registered, in force, clearly owned and enforceable?

The pack expresses the outcome as a plain result — a RAG rating per asset — so the committee can see at a glance which assets are genuinely bankable and which are supporting colour. See collateral suitability for the concept in full.

7. A realisation view

Because collateral only matters if the loan fails, the pack sets out what the asset would fetch in a disposal — an orderly-liquidation rather than a going-concern figure — and how that value ranks in insolvency. A fixed charge by patent number sits ahead of a floating charge; the realisation view makes the recovery position explicit. See orderly liquidation value.

8. Financials summary

Finally, the debt-serviceability picture: two to three years of statutory accounts, current management accounts, a forecast and, for IP-backed facilities, projections with sensitivity. Lenders typically look for a debt service coverage ratio around 1.20–1.25× as a floor. Licensed IP with attributable royalty income is the preferred collateral precisely because the repayment source and the security are the same asset. See debt serviceability.

The pack at a glance

How to assemble it

Work outside-in. First establish the register and clean the title — an assignment gap or an unregistered charge will sink the file regardless of how strong the valuation looks, so fix those before commissioning valuation work. Then run the encumbrance searches, commission the IVS-aligned valuation on a conservative premise, grade the evidence, and only then form the suitability and realisation views. The financials summary ties the collateral back to the cash flow that will actually service the loan.

How Opagio's Collateral Pack produces it

Opagio assembles this end-to-end as a single output. The platform builds the named-asset register, attaches title and encumbrance evidence, produces the per-asset IVS-aligned valuation, applies L0–L4 grading, returns the collateral-suitability rating across the three lender tests as a RAG result, sets out the realisation view, and appends the financials summary — one lender-facing pack in the shape a credit committee reads. Advisers can produce a first draft in the Intangible Asset Valuator, pressure-test it against the Lending Readiness Report, and consult the lender's guide to anticipate how the committee will grade what they submit. For the wider borrowing context, the IP-backed loans pillar covers eligibility, and the lending standards hub sets out the underwriting expectations the pack is built to satisfy.