IP-backed lending lets a business borrow against the value of its intellectual property, rather than relying only on property, plant and receivables. For renewables and cleantech founders whose value sits in patents, software and know-how, that matters. The intangible base is often the largest part of what the business owns, and a conventional lender may give it little weight.
Two UK banks publish IP-backed loan programmes, and the terms in this article are the published ones. Every other lender sets its own ratios and terms, so there is no market-wide standard advance rate. The practical question for a founder is therefore not "what is the going rate", but "what evidence supports an independently assessed IP value, and what will a given lender advance against it".
UK cleantech founders can borrow against their IP through the published NatWest and Royal Bank of Scotland programmes, or through lenders that set their own terms. In every case the lender relies on an independent valuation of the IP, applies its own advance ratio, and still needs the business to service the loan from cash flow. A founder who arrives with a clear register of what the business owns, independent valuation evidence and a monetisation story gives the lender something to underwrite.
Not every valuable renewables asset is intellectual property, and the difference decides which lender looks at it. Power purchase agreements (PPAs), grid connection offers and planning consents are intangible assets, but they are contractual or regulatory rights attached to a project, not IP rights.
| Asset | Legal nature | How it can support finance |
|---|---|---|
| Patents (for example storage, tracker control, electrolyser or power electronics designs) | Registered IP right | Can be valued independently and offered as security in an IP-backed loan |
| Software, firmware and algorithms | Copyright and trade secret | Value depends on licensing or embedded revenue; ownership and assignment need to be documented |
| Operational and O&M data, process know-how | Confidential information | Harder to evidence and to transfer; value rests on documented ownership and use |
| PPAs | Contract | Underpin project cash flow; project lenders review them through the project's security package |
| Grid connection offers and planning consents | Contractual and permit rights | Project-level assets; whether they transfer depends on their terms and on the counterparty or authority |
The IP-backed programmes below look at intellectual property. Project lenders generally look at PPAs, grid rights and consents through the security package of the project company, which is why the two kinds of finance are normally separate conversations. See Intangibles in solar project finance for the project side.
NatWest's High Growth IP Loan, available in England and Wales since January 2024, lends from £250,000 at up to 50% of the independently assessed value of the IP. The Royal Bank of Scotland has offered an IP-backed loan in Scotland since June 2026, lending £250,000 to £10m at up to 50% of the IP's orderly disposal value.
Orderly disposal value is what the IP would realise in a controlled sale, rather than the value it has inside a trading business. Lenders look at it because their question is what they could recover if the borrower defaulted, and markets for IP are thinner than those for property or receivables. The figure a lender uses can therefore sit well below a going-concern or fundraising valuation of the same patents. The loan is also capped by the debt the business's cash flow can service.
HSBC UK launched its Growth Lending fund in 2022, and the fund has been £350m since December 2023. HSBC UK evaluates IP within that lending, but it has published no IP loan size or advance rate, so a founder should not assume a ratio.
Other banks and specialist lenders set their own ratios and terms. Ask each one for its basis of valuation, its advance ratio and what else it requires, rather than assuming the published bank terms apply.
The British Business Bank's Growth Guarantee Scheme, which replaced the Recovery Loan Scheme in July 2024, supports term loans, overdrafts, asset finance, invoice finance and asset-based lending through accredited lenders; it has no named IP-backed product. Separately, in July 2026 HM Treasury announced that the British Business Bank had allocated £500 million of its ENABLE Guarantee capacity to lending to IP-rich SMEs and scaling firms; that support works through the lenders that use the guarantee, which set their own terms. The UKIPO's IP Audit scheme, delivered in England through Innovate UK Business Growth, part-funds IP audits for SMEs.
| Lender | Programme | Advance | Loan size | Where |
|---|---|---|---|---|
| NatWest | High Growth IP Loan, since January 2024 | Up to 50% of independently assessed IP value | From £250,000 | England and Wales |
| Royal Bank of Scotland | IP-backed loan, since June 2026 | Up to 50% of orderly disposal value | £250,000 to £10m | Scotland |
| HSBC UK | Growth Lending fund (launched 2022, £350m since December 2023) | No IP advance rate published | No IP loan size published | UK |
| Other banks and specialist lenders | Their own products | Set by each lender | Set by each lender | Varies |
Five elements give a lender something to assess. None of them guarantees a loan, and each lender will apply its own view.
A long list of patents is hard to assess one by one. Group them into technology families and record, for each family, the claim scope, remaining life, the jurisdictions covered and the enforcement status.
In Opagio Intangibles, each family can be recorded as an asset in the Value Drivers Register, and the Asset Valuator can produce an indicative valuation to prepare you for the conversation. A lender will rely on an independent valuation, so treat the platform output as preparation, not as a substitute. Book a demo.
Each family needs a valuation from a qualified independent valuer. The report should state the method (relief from royalty, multi-period excess earnings, with and without, or cost), the comparable evidence relied on, the useful life, the discount rate and the resulting value, with a range rather than a single figure.
Comparable evidence carries a great deal of weight. Disclosed licence agreements, royalty databases (ktMINE, RoyaltyStat) and litigation-derived rates are stronger evidence than general industry surveys. Where the IP is collateral, the RICS standard on valuing IP rights notes in its Appendix A that the lender may want the valuer to consider a liquidation premise. See IVS 210 vs RICS Red Book.
For each family, the lender needs to understand how the IP produces revenue: direct licensing, embedded product revenue, or protection of a customer relationship. The attribution should be specific. Generic platform revenue is not a basis for IP collateral.
Lenders want to see that the patents can be enforced. That means granted claims rather than pending applications, clear ownership, and a plan and budget for defending the rights. Patents granted in more than one jurisdiction cover more of the markets in which a buyer of the technology would operate.
If the borrower defaults, the lender needs to know how the IP could be realised by a third party. For licensable IP this is more straightforward, because a licence can be transferred. For IP embedded in a product the question is harder: could a successor commercialise it independently of the failing business? A founder who answers that question in advance gives the lender more comfort.
Consider an illustrative UK perovskite specialist that holds 8 issued patents across composition and stability chemistry, independently valued at £6m using relief from royalty with disclosed comparable rates. The IP register documents claim breadth, coverage in the UK, EU, US, Japan and Korea, and a third-party licence already producing royalty income. A lender advancing up to 50% of its own valuation could offer at most £3m, and less if it values the IP on a disposal basis or the cash flow cannot service the debt. Without the register and the independent valuation, the lender would have little to underwrite.
Each lender sets its own terms. The table below lists features that commonly appear in secured lending against IP. They are not the published terms of any single programme.
| Term | What a lender may ask for |
|---|---|
| Security | A charge over the IP, registered at Companies House within 21 days and recorded against the relevant register at the UK IPO. See charges over IP and section 859A |
| Advance | A ratio of the IP value: up to 50% in the two published bank programmes, set by each lender elsewhere |
| Revaluation | Fresh valuation of the IP during the term, so that the lender can test the security |
| Covenants | Keeping renewal fees paid and the patents in force, and not transferring, licensing or charging the IP without consent |
| Repayment source | Operating cash flow first, with the IP as the fallback if servicing fails |
| Enforcement | On default, rights over the charged IP are exercised under the security documents; recovery depends on whether the IP can be sold or licensed apart from the business |
The lender will want independent valuation evidence, a credible way to enforce and realise the IP, and a business that can service the debt from cash flow. A founder who has these in place before the first meeting is negotiating from a stronger position than one who is still assembling them.
Cleantech businesses raising IP-backed debt usually have other capital in play. Three interactions matter.
Debt secured on IP does not dilute ownership, while equity funds growth that cash flow cannot yet support. Because the loan has to be serviced from cash flow, a business with no revenue has little to show a lender; pre-revenue companies more often rely on equity, grants and Innovate UK funding first.
Project finance sits at the level of the project company and is secured on the project's contracts and assets. IP-backed debt sits in the company that owns the IP. Each lender will want to understand the other's security and any restrictions on granting new charges, so check the existing finance documents before offering a charge over IP.
Innovate UK grants and EIS or SEIS investment can fund the IP development that underpins a later debt facility. The IP register can be built as the patent portfolio matures, and debt becomes a realistic option once the portfolio includes enforceable patents and a clear route to revenue.
Five gaps weaken a cleantech IP-backed lending application. They follow from what a lender needs to assess.
No independent valuation. A lender relies on an independent valuation of the IP. A founder's own estimate is not a substitute.
Narrow patent coverage or unclear ownership. Patents granted only in the UK may cover only part of the markets in which the technology would be used, which can limit what a lender will treat as collateral. Unclear ownership, for example IP created by contractors without a written assignment, is a more basic problem still.
Monetisation pathway not articulated. A lender needs to understand how the IP produces revenue, today or in the near term. Pre-revenue IP without a clear route to income is difficult to lend against.
Useful life not defended. The legal life of a patent is a ceiling, not a forecast. A long assumed life for fast-moving technology, without supporting analysis, weakens the valuation.
Enforcement that depends on one person. Where prosecution, defence and licensing of the patents rest with the founder alone, a lender has less comfort that the IP can be protected and realised. A documented IP policy, a defence budget and a relationship with professional patent counsel help.
Three actions for UK cleantech founders considering IP-backed lending.
Build the IP register well before the facility is needed. The register, independent valuation and comparable evidence take time to assemble. Founders who start before the financing is urgent have stronger conversations.
Consider patent coverage in the markets that matter to your technology. UK-only coverage can limit collateral value. Take advice from patent counsel on where to file, as the right answer depends on where the technology will be made, sold and licensed.
Use the UKIPO-funded IP Audit scheme. The UKIPO part-funds IP audits for SMEs through its regional partners (in England, Innovate UK Business Growth): £2,250 including VAT towards the audit, with the business contributing £750 (GOV.UK, October 2026). The audit establishes what the business owns and where title is weak, which is the starting point for the register a lender will review. Our IP audit guide sets out the terms.
See IP lending eligibility framework, IP lending calculator and the Opagio IP Audit waitlist.
It is difficult. A lender needs to be satisfied that the loan can be serviced from the business's cash flow, with the IP as security, so a business with no revenue has little to show. Pre-revenue companies more often fund development through equity, grants and Innovate UK funding first. Lenders that set their own terms may take a different view, so it is worth asking.
No. They are intangible assets, but they are contracts and permits attached to a project, not intellectual property rights. The published IP-backed programmes look at IP such as patents. Project lenders generally review PPAs, grid rights and consents through the project company's security package.
The valuer identifies the IP, agrees the basis and premise of value with the client, selects a method, gathers comparable evidence, and reports the useful life, discount rate and a value range. NatWest lends against independently assessed IP value, and the Royal Bank of Scotland against orderly disposal value, so confirm with the lender what it requires. The cost depends on the number of families and the scope, so ask for a quote that states the premise of value. The UKIPO IP Audit scheme part-funds an audit of what you own, which is not a valuation.
Not equally. Technologies with disclosed, comparable licence terms are easier to value defensibly. Where licensing evidence is thin, which is more common with newer technologies, the valuer relies more on judgement and the value range is wider. How much any lender advances remains its own decision.
Opagio is not a lender and does not arrange loans. Opagio Intangibles helps you record and value your intangible assets, including patent families, so that you can prepare for a lender conversation. The lender relies on its own or an independent valuation, and no lender has agreed to accept Opagio output in place of one. Book a demo.
Venture debt is typically lent to venture-backed companies to extend runway between equity rounds. IP-backed lending is sized against an independent valuation of identified IP, which the lender holds as security. Both can sit in a financing plan, but the security each lender takes needs to be compatible with the other's.
Ivan Gowan is the Founder and CEO of Opagio. He brings 25 years of experience building and scaling technology platforms in financial services. Meet the team.
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