Do I lose ownership of my IP if I use it as collateral?

Full Explanation

No — using your intellectual property as collateral does not mean giving it away. What you grant the lender is a security interest, not a permanent transfer. Under the most common structures — a fixed or floating charge over the IP — you retain ownership throughout and simply agree not to dispose of the charged rights without consent. Even under a legal mortgage or assignment by way of security, where legal title is transferred to the lender for the duration of the loan, a licence-back lets you continue using and commercialising the IP exactly as before, and full title returns to you once the debt is repaid. Day to day, nothing changes about how you run the business. Ownership only becomes an issue if you default and the lender enforces its security. At that point the lender can sell or licence the IP to recover what it is owed — the same principle as a mortgage on a house, where the bank only takes the property if repayments fail. This is why lenders treat collateral as the secondary, fallback source of repayment: the primary source is operating cash flow, and a well-structured facility is one you service comfortably from revenue, never one where the lender is banking on seizing your IP. Over-reliance on collateral is a recognised underwriting weakness, not a lender's goal. It is worth understanding what the lender registers. The charge is recorded at Companies House within 21 days under section 859A of the Companies Act 2006, and for IP it is also noted at the UK Intellectual Property Office. This is a public record that a charge exists — it protects the lender's priority, but it is not a transfer of ownership to the world. When you repay, the charge is discharged and those registrations are cleared. For a founder weighing IP-backed lending as non-dilutive funding — borrowing against your IP rather than selling equity — the reassurance is that you keep both ownership and control provided you service the loan. The sensible next step is to model whether your cash flow comfortably covers the repayments, using a debt service coverage ratio (lenders commonly look for around 1.20–1.25×), so that the collateral genuinely stays a fallback. Opagio's collateral pack pulls your register, valuation and financials together so you can see both the security on offer and your capacity to service it before you commit.

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