An interesting read and something we wanted to bring to your attention.

This proposal aims to offer businesses that do not hold conventional assets, such as property, an opportunity to leverage their intangible IP assets to secure growth funding.

This innovative move by NatWest signifies a departure from traditional lending practices, highlighting a broader shift towards more diverse considerations in lending decisions.

NatWest recognises that high-growth businesses generally own few concrete assets. However, despite their valuable IP portfolio, these businesses can encounter hurdles when attempting to use their assets as collateral to secure funding, in contrast to businesses with more conventional asset holdings.

NatWest’s proposed lending model is similar to that of a mortgage, where the lender holds a claim until the loan is fully repaid, like a mortgage secured against a property.

Considering the projected yearly shortfall in growth financing for businesses with minimal physical assets, which is estimated to be as high as £15 billion, it seems there’s a significant opportunity for rapidly expanding, intellectual property-driven companies to bridge this gap.

NatWest has confirmed that it is committed to a thorough review process for loan applications to verify whether businesses meet the criteria for standard lending. However, for high-growth businesses that don’t meet traditional security requirements, the bank may use the business’s eligible intellectual property (IP) assets as security.

NatWest’s approach reflects a progressive understanding of the vital contribution of IP to the growth and value of companies. It marks a departure from conventional lending practices by incorporating a broader range of factors in its decision-making process. Business owners will likely welcome this development, as it places a higher value on the intangible assets of a business, which have traditionally been overlooked or underestimated in financial assessments.

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