NatWest rolls out its first ‘mass market’ IP-backed loans

NatWest rolls out its first 'mass market' IP-backed loans

NatWest has recently made waves by facilitating its first “mass market” commercial loan backed by intellectual property (IP).

This deal, executed in partnership with Sci-Net, a software company based in Oxfordshire, signifies a shift towards leveraging intangible assets for financing in the business world.

Sci-Net, which develops business software solutions catering to brands like Jessica McCormack, secured a £700,000 loan from NatWest.

Duncan Fergusson, Sci-Net’s owner, emphasised the significance of this loan, highlighting how it enables private companies like his to sustain substantial investments in software development.

Traditional loans, as Mr Fergusson noted, often fall short in adequately supporting companies lacking physical assets like buildings. However, with IP-backed loans, there’s a virtual asset that translates into better rates and increased flexibility, offering a lifeline to firms heavily invested in intellectual property.

Neil Bellamy, NatWest’s head of technology, media, and telecoms, sees this initiative as pivotal in unlocking the latent value of IP and intangible assets, potentially fuelling growth in the UK economy, The Times reports.

Securing such loans involves a meticulous process, with companies required to divulge information about their software and engage with valuation partners like Inngot. Despite the rigorous evaluation, Mr Fergusson acknowledged the viability of this approach, though he notes that the valuation might not match expectations in scenarios like equity sales to private equity firms.

NatWest’s move aligns with broader trends in the financial landscape, where IP-backed lending is gaining traction. HSBC’s £5 million loan to Glasswall and NatWest’s own venture through Lombard exemplify this shift, reflecting a growing appetite for innovative financing models.

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