How much can I borrow against my IP?

Full Explanation

There is no fixed figure. The amount you can borrow against intellectual property is set by an independent valuation, the strength of your legal title, and how readily the IP could be sold or licensed if you defaulted. As a general guide, specialist and bank IP lenders in the UK advance up to around 50% of appraised value where the IP is registered and insurance-backed, with broader-market loan-to-value ratios closer to 20-40%. NatWest's High Growth IP Loan, for example, ranges from £250k to £10m at up to roughly half the appraised IP value, revalued annually by an independent valuer. The headline valuation is only the starting point. Lenders derive a security value by applying three tests to your assets: separability (can the IP be sold or licensed apart from the business), saleability (how readily it could be realised on default), and legal strength (is title clean, in force and enforceable). That weighted view is applied to an orderly-disposal figure rather than a going-concern one, and it is this conservative number that sets your loan-to-value. Registered rights such as patents and trade marks carry more weight than unregistered ones, and IP with attributable royalty or licence income is the most fundable of all. Crucially, collateral is the fallback, not the main event. Operating cash flow is the primary source of repayment, so lenders assess whether the business can comfortably service the debt, typically looking for a debt service coverage ratio of around 1.20-1.25 times. Over-reliance on collateral is a recognised underwriting failure, so a strong IP valuation will not rescue weak serviceability. You will also need a documented chain of title, evidence that renewals are paid, and clear encumbrance searches at both Companies House and the UK IPO. All figures here are indicative ranges reflecting general market practice, not offers. To size your own borrowing capacity, start by assembling an evidence-backed picture of what you own and what it is worth: a valuation to a recognised standard, a documented title chain, and two to three years of accounts plus a forecast. That pack is what a lender will actually credit-assess, and it is exactly what Opagio's collateral and evidence tooling is built to produce.

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