IP-Backed Lending: UK Lenders, Eligibility and How Much You Can Borrow

IP-backed lending is a business loan secured on the borrower's intellectual property, such as patents, registered trade marks, software and copyright, rather than on property or a personal guarantee. In the UK, NatWest has offered it in England and Wales since January 2024 and the Royal Bank of Scotland since June 2026, each lending up to 50% of the IP's value as assessed by an independent valuer (for the Royal Bank of Scotland, its orderly disposal value). How much you can borrow is the lower of that collateral limit and the debt your cash flow can service.

Last reviewed: October 2026. UK scope: England and Wales unless stated, with Scotland flagged where the law differs. Lender terms are taken from the lenders' own published material and change; confirm them with the lender before relying on them.

How IP Lending Works in the UK

In IP lending, the lender takes security over specific intellectual property. If the borrower defaults, the lender can enforce that security, usually by selling or licensing the IP. Repayment is still expected to come from trading cash flow. The IP is the lender's fallback, which is why every lender tests both the asset and the business behind it.

UK banks came to this late, and for structural reasons. NatWest's own launch announcement in January 2024 described the problem plainly: high-growth businesses "generally own few tangible assets, but can be rich in IP", and struggle to use those assets as collateral. Under NatWest's approach, the bank first checks whether a borrower qualifies for standard lending on conventional security. Only if it does not will it consider using the borrower's qualifying IP as collateral.

The British Business Bank and the Intellectual Property Office (UKIPO) set out why the market had been thin in a joint 2018 report, Using Intellectual Property to Access Growth Funding. Their roundtables identified four obstacles.

Four obstacles to lending against IP (British Business Bank and UKIPO, 2018)

The same report gave lenders a reason to look again. Matching Enterprise Finance Guarantee (EFG) loans against the UKIPO's register of rights, the British Business Bank found that companies holding patents, trade marks or registered designs defaulted less often, and cost lenders less when they did, than the EFG portfolio as a whole.

Default and loss rates on EFG-backed loans, April 2009 to March 2016

Source: British Business Bank and UKIPO, Using Intellectual Property to Access Growth Funding (2018), figure 4.

Policy has continued in the same direction since. The UK's Modern Industrial Strategy (June 2025) committed the British Business Bank to "tackle specific barriers for IP-rich sectors, working with the Intellectual Property Office to explore how to help businesses raise debt finance secured on intangible assets". The UKIPO's Innovation and Growth Report 2025/26 records that work across government and industry. In July 2026 HM Treasury announced that the British Business Bank had allocated £500 million of the capacity in its ENABLE Guarantee programme to support lending to SMEs and scaling firms rich in IP. That support works through the lenders that use the guarantee; it is not a loan a business applies for.

Intellectual Property Lenders in the UK

The table below lists only programmes with current, public documentation from the lender itself. Where a figure appears, it is the lender's own published figure.

UK IP-backed lending programmes with public documentation (October 2026)

NatWest's first loan under the programme went to Sci-Net Business Solutions, an Oxfordshire software company, which borrowed £700,000 against IP that Inngot valued. In February 2026 the bank reported a £1.35m loan to Shade Station, a Manchester eyewear retailer, secured on its proprietary software and registered trade marks. The Royal Bank of Scotland's product, the first of its kind in Scotland, was made possible by the Moveable Transactions (Scotland) Act 2023, which created a registrable security over intangible property (see the security section below).

What IP Qualifies, and Which Businesses Are Eligible

Eligibility has two halves: the IP itself, and the business that owns it. NatWest's published list of the IP its valuer may assess includes software, patents, copyrights, trade marks and registered designs. Within those classes, lenders favour rights that are identifiable, legally clean, separable from the business and capable of being sold.

IP collateral suitability by type

The business half is set by each lender. NatWest's programme is for "high growth" businesses, which it defines as showing 20% year-on-year growth in turnover over three consecutive years (minimum turnover £250,000) and/or at least £50,000 of equity or grant investment in the last two years. Lenders will also want accounts, management information and a clear use of proceeds.

To test your own position, the IP loan eligibility checklist on our lending hub is a self-assessment: three traffic-light tables covering IP registration and ownership, revenue attribution and business readiness, with a reading of what mostly green, amber or red answers mean. It does not submit an application or contact a lender.

Valuation and Due Diligence

No lender advances against IP without an independent valuation, and the premise of that valuation matters as much as the method. Three premises recur in lending.

Three valuation premises in IP lending

Valuation methods lenders see for IP

Relief from royalty is common in lending because it answers a question a lender cares about: what would a third party pay to use this IP? The multi-period excess earnings method suits portfolios where the value sits in customer-facing technology. The standards behind a lending valuation, IVS 210 and the RICS Red Book, are compared in IVS 210 vs the RICS Red Book for lending, and the method choices in IP valuation for lending.

Valuation is not a one-off. NatWest says it revalues the IP annually while the loan runs, so the value has to stay evidenced for the life of the facility.

The five checks in lender due diligence on IP

How Much Can I Borrow Against IP?

A lender sizes an IP-backed loan with two tests and offers the lower result.

1. The collateral test. The lender applies its advance rate, its loan-to-value ratio, to the value of the IP on its chosen premise. The Royal Bank of Scotland publishes up to 50% of orderly disposal value; NatWest publishes up to 50% of the IP value in its valuer's report.
2. The cash-flow test. The lender checks that the business can meet interest and capital repayments with headroom, usually through a debt service coverage ratio (DSCR): cash available for debt service divided by the debt service due. Our guide to DSCR for IP-backed loans gives the common 1.20x to 1.25x benchmark.

Worked example: sizing a loan against software and trade marks (illustrative)

The company, the figures and the lender's terms below are illustrative assumptions, not any lender's offer. A UK software business owns its platform code and registered trade marks. An independent valuer puts their value in use at £3.0m and, on an orderly disposal premise, at £1.8m. The business generates £540,000 a year of cash available for debt service. The lender lends over five years at 10% a year, repays capital in equal instalments and requires a DSCR of at least 1.25x.

The collateral test binds. The business borrows £900,000, which is 30% of the £3.0m the IP is worth in use, and comfortably clears the cash-flow test.

Change one input and the other test can bind. If the same business generated £300,000 of cash available for debt service, its maximum annual debt service would be £240,000 (£300,000 ÷ 1.25), and its cash-flow limit £800,000 (£240,000 ÷ 0.30). That is below the £900,000 collateral limit, so the loan would be £800,000, however valuable the IP.

For a first indication, the IP loan calculator on our lending hub takes your own estimates of patent, trade mark and software value and applies fixed loan-to-value assumptions to each (35% to 50% for patents, 25% to 40% for trade marks and software) to show a low and a high figure. It does not value the IP and does not test cash flow. Entered as software, the £3.0m in this example returns £750,000 to £1,200,000; a lender working from disposal value and DSCR may offer a different figure. Patent owners will find the same two tests applied to a patent in how much you can borrow against a patent, and our FAQ gives a short answer for all IP types.

Security: How the Lender Takes and Registers Its Charge

A lender secures an IP-backed loan with a fixed charge or a legal mortgage (an assignment of the IP by way of security) over the named IP, often inside a debenture that also gives a floating charge over the rest of the business. Two registrations then matter in England and Wales, and a different regime applies in Scotland.

Where security over IP is registered in the UK

• Companies House. Under section 859A of the Companies Act 2006, a charge created by a company is registered by delivering a statement of particulars within 21 days, beginning with the day after the charge is created. If it is not delivered in time, section 859H makes the security void against a liquidator, an administrator and the company's creditors, and the money secured becomes immediately payable. The debt itself survives; the lender loses its security, not its claim. Our Companies House charge over IP guide covers the filing step by step.
• The UKIPO registers. Recording the security against the patent or trade mark protects the lender's priority. Under section 33 of the Patents Act 1977, a later transaction can take priority over an earlier one that was not registered, if the later party did not know of it. Under section 25 of the Trade Marks Act 1994, an unregistered security interest is ineffective against someone who acquires a conflicting interest in ignorance of it.
• Scotland. The Moveable Transactions (Scotland) Act 2023 created the statutory pledge. Over incorporeal property, which for this purpose means intellectual property and applications for or licences of it, a pledge is created only by registration in the Register of Statutory Pledges kept by Registers of Scotland (sections 42, 47 and 48). The Royal Bank of Scotland names the Act as what enabled its product.

Loan Terms and Covenants

An IP-backed facility carries the covenants of any secured term loan, plus some specific to the collateral. Expect most of the following, in a form negotiated with the lender.

Covenants to expect in an IP-backed facility

Structures Beyond a Bank Term Loan

The bank programmes above lend to the operating company against IP it owns. Larger or more complex borrowers sometimes use other structures.

An IP holdco. The IP is moved into a separate group company, which licenses it back to the operating company and charges it to the lender. Enforcement is cleaner because the lender can act against a company that holds only the IP. The cost is complexity: the licence-back must let the business keep trading if the lender enforces, and moving IP within a group has tax consequences, including transfer pricing where the companies are in different countries. Take tax and legal advice before restructuring.

Revenue-backed structures. Where IP earns contracted, recurring revenue, finance can be secured on that revenue instead of, or as well as, the IP. Our guides to revenue-based financing for intangible-heavy businesses and intangible asset securitisation cover these routes. Venture debt is a third option for equity-backed companies, underwritten mainly on the strength of the equity backing rather than the IP.

Preparing an Application

The preparation decides both the answer and the loan size. Work through these steps before you approach a lender.

A lender-ready file brings these together; the IP collateral pack for lenders sets out what goes in it.

Common Pitfalls

Most failed or shrunken IP-backed loans trace back to one of four avoidable mistakes.

Four pitfalls in IP-backed lending

Where Opagio Fits

Opagio is not a lender and does not arrange or broker loans. Opagio Intangibles values each intangible asset with the Asset Valuator's recognised methods, including relief from royalty, MPEEM and with-and-without. It records the results in the Opagio Value Drivers Register, the evidence base a lender's valuer and credit team can test. For lender guides, the eligibility checklist and the calculator in one place, start at the Opagio lending hub.

Frequently Asked Questions

What is IP-backed lending?

IP-backed lending is a loan secured on a company's intellectual property, such as patents, registered trade marks, software and copyright. The lender takes a charge over the IP and can enforce it on default, but expects repayment from trading cash flow. In the UK, NatWest and the Royal Bank of Scotland run published programmes.

Which UK lenders offer IP-backed loans?

NatWest has offered its High Growth IP loan in England and Wales since January 2024, and the Royal Bank of Scotland launched an IP lending product in Scotland on 3 June 2026. Both use Inngot as the independent IP valuer. Other lenders may take IP security within wider facilities; check with each lender directly.

How much can I borrow against IP?

A lender offers the lower of two limits: its advance rate applied to its valuation of the IP, and the debt your cash flow can service at its required DSCR. NatWest and the Royal Bank of Scotland lend up to 50% of the independently assessed IP value (orderly disposal value at the Royal Bank of Scotland), so the loan is usually a smaller share of the IP's value in use. In our illustrative example it is 30%.

What IP qualifies as collateral for a loan?

Granted patents, registered trade marks, registered designs, copyright and proprietary software can all qualify, and NatWest names each of them. The IP must be owned cleanly by the borrowing company, capable of being valued and sold, and linked to revenue. Trade secrets are rarely accepted as primary collateral.

How is a charge over IP registered in the UK?

The company, or anyone interested in the charge, delivers a statement of particulars to Companies House within 21 days, beginning with the day after the charge is created (Companies Act 2006 s.859A). The lender should also record its security at the UKIPO for patents and trade marks, to protect its priority against later transactions. Scotland adds the statutory pledge. See our Section 859A explainer.

Related Reading

Guides

• Intellectual property collateral: the UK guide
• IP finance in the UK: a guide to intangible asset loans
• How advisers help clients access IP finance

Evidence, glossary and FAQ

• Bank lending to high-growth firms: what the Bank of England's data means for IP-rich businesses
• How orderly liquidation value is used in IP lending
• Non-dilutive funding and perfection of a security interest

Sources

NatWest Group press releases of 12 January 2024, 24 February 2026 and 3 June 2026; NatWest, "Sci-Net secures market-first IP-backed loan" (2024); HM Government, The UK's Modern Industrial Strategy (June 2025), pp. 49–50; HM Treasury press release on the Growth Guarantee Scheme and ENABLE Guarantees (13 July 2026); The Patent Office Innovation and Growth Report 2025/26 (July 2026); British Business Bank and Intellectual Property Office, Using Intellectual Property to Access Growth Funding (2018); Intellectual Property Office, Banking on IP: IP finance toolkit (March 2015); Companies Act 2006 ss.859A and 859H; Patents Act 1977 s.33; Trade Marks Act 1994 s.25; Moveable Transactions (Scotland) Act 2023 ss.42, 47 and 48.