How Much Can You Borrow Against a Patent? (UK)

A UK innovator with a granted patent and growing revenue can raise real debt against it — and one high-street bank now lends up to around 50% of a patent's independently appraised value, with the broader market typically sitting in the 20–40% range. That single number is where most founders start and most also stop, because the figure you actually receive depends far less on how clever the invention is and far more on how well you can evidence it. This guide sets out what to expect when you borrow against a patent in the UK, what drives the loan-to-value (LTV), and how to prepare so the number lands at the top of the range rather than the bottom.

What LTV Can You Expect on a Patent?

There is no single national rate. The number you are offered reflects the strength of your rights, the quality of your evidence, and — crucially — the cash your business generates. As an indicative guide:

Indicative patent-backed LTV ranges (UK, mid-2026)

These are indicative ranges, not guarantees — every facility is underwritten on its own facts. NatWest's route, launched in January 2024 as the first from a UK high-street bank, carries a "high growth" gate: roughly 20% year-on-year turnover growth over three years (minimum £250k turnover) and/or at least £50k of equity or grant funding raised in the past two years. If you clear that gate and your rights are clean, the top of the range becomes realistic. For a fuller picture of the lenders and their appetites, see our IP-Backed Loans UK hub and the dedicated pages on NatWest IP-backed loans and HSBC growth lending.

The Three Lender Tests That Set the Number

Every credible IP lender applies the same underlying question to your patent: in a default, could this asset be separated from the business, sold, and defended? That resolves into three tests.

1. Separability

Can the patent be lifted out and sold on its own, or is it so entangled with your team, know-how, and customer relationships that it has no value apart from you? A patent assigned to a clean corporate entity, with the underlying know-how documented, scores well. One that only functions in the founder's head does not.

2. Saleability

Is there a realistic buyer in an orderly disposal? A patent underpinning a product with attributable, recurring revenue — or licensed out for a royalty — is far more saleable than a speculative filing with no commercial track record. Licensed IP with attributable royalty income is, for this reason, the collateral lenders most prefer.

3. Legal Strength

Is the right registered, in force, and unencumbered? Granted and renewed patents carry more weight than unregistered or lapsed rights. The lender will run encumbrance searches at both Companies House and the UK IPO, and will want a documented chain of title — contractor and employee inventions must be properly assigned to the company.

The security value a lender attaches to your patent is, in practice, a blend of these three tests applied to an orderly-disposal value — and that blended figure, not the headline "going-concern" valuation, is what your LTV is calculated against. Our collateral suitability and orderly liquidation value glossary entries unpack both concepts.

How the Patent Is Valued for Lending

Lending valuations sit at the conservative end of the spectrum and follow the International Valuation Standards — IVS 210 for intangible assets, within the 2025 IVS framework (reporting under IVS 106, bases of value under IVS 102). A valuer will typically apply one of three families of method:

• Income — Relief-from-Royalty (RFR), Multi-Period Excess Earnings (MPEEM, after contributory-asset charges), With-and-Without (W&W), Greenfield, or Distributor methods.
• Market — comparable transactions, where evidence exists.
• Cost — replacement or reproduction cost, usually a floor rather than the answer.

A note on lenses: RFR, MPEEM and W&W are asset-level IVS 210 methods for valuing an individual intangible — they are not the investment-level techniques (such as IPEV fair-value approaches) used to value a fund's holding in a whole company. Keeping that distinction clear matters, because a lender is valuing your patent, not your equity.

For collateral, RICS guidance (its 2020 "Valuation of IP rights" and Red Book VPGA 6, Appendix A on valuations supporting IP debt financing) directs the valuer to an orderly-liquidation or forced-sale premise, with conservative inputs: a low-end royalty rate, a risk-adjusted discount rate, a finite economic life, and a cautious terminal value. The report must present ranges and sensitivities rather than a single "most likely" figure that hides the downside. Our valuing IP for secured lending standard goes deeper, and the Lending Readiness Report packages an IVS-aligned figure for your lender.

A Worked Indicative Example

Consider a UK deep-tech company with £2m turnover, granted patents underpinning its core product, and clean title. An independent valuer assesses the patent portfolio's going-concern value at £4m, but on the orderly-disposal premise a lender works to a more conservative £3m.

Illustrative facility sizing (indicative only)

Whether that £1.2m is actually advanced then turns on serviceability. Operating cash flow — not the collateral — is the primary repayment source; the patent is the fallback. Lenders test this with the Debt Service Coverage Ratio (DSCR = net operating income, or EBITDA less cash taxes, divided by total debt service). A ratio below 1.0 signals a shortfall; a minimum of around 1.20–1.25× is a common expectation. Even a well-valued patent will not unlock a facility the business cannot service. See serviceability and DSCR for the full mechanics.

How to Prepare Before You Apply

The gap between a rejected application and a 50% LTV is almost always preparation. A lender-ready package assembles the register, valuation, evidence and financials into one coherent story:

• Prove clean title — assignments in place for every inventor, contractor and employee; renewals paid; the patent in force.
• Attribute the revenue — show which sales or royalties the patent underpins, so saleability is evidenced not asserted.
• Commission an independent, IVS-compliant valuation on the lending premise (ranges and sensitivities, not a single optimistic number).
• Bring the financials — two to three years of statutory accounts, current management accounts, a forecast, aged debtors and creditors, plus roughly three years of projections and sensitivity for the IP-backed element.
• Assemble the evidence pack — a graded, auditable trail a diligence team can follow without chasing you for documents.

Advisers preparing a client can start with our borrower's guide and the practical walk-throughs on preparing a client for an IP-backed loan and building the collateral evidence pack.

The Short Answer

You can realistically borrow against a patent in the UK at an indicative 20–40% of appraised value across the specialist market, rising to around 50% with a high-street route such as NatWest or an insurance-backed structure — provided your rights are registered and clean, the revenue is attributable, and your cash flows service the debt. The patent sets the ceiling; your evidence and serviceability decide where within it you land.

Ready to size your own number? Get a defensible number from the Lending Readiness Report, then explore the lenders and requirements on the IP-Backed Loans UK hub to turn an indicative figure into a fundable one.