Britain has a problem. Our most innovative companies cannot borrow against the very thing that makes them successful.
That is why we are delighted to share that the Intellectual Property Assets Coalition (IPAC) has officially launched. IPAC brings together leaders from across FinTech, banking, insurance and policy with one shared goal: to bridge the knowledge assets gap and help the UK’s IP-rich businesses unlock the growth capital they need.
The knowledge assets gap
From start-ups to university spin-outs, the UK is home to some of the most innovative ideas in the world. Yet businesses whose value sits in intangible assets, such as patents, software, designs, data and know-how, often struggle to access the finance they need to stay, scale and grow here in the UK.
The reason is simple. Traditional lending is built around physical collateral like property and machinery. Under current prudential rules, banks find it difficult to lend against intellectual property, even when that IP is the most valuable thing a business owns.
The numbers show the scale of the challenge:
- 70 to 80% of the average UK business’s value is made up of intangible assets
- There is a £15 billion growth capital gap facing companies across the UK
- UK scale-ups account for around 50% of total SME turnover
In short, the businesses driving the UK economy forward are often the ones least able to borrow against their true worth.
What is IPAC?
IPAC is a UK policy and finance coalition formed to tackle the knowledge assets gap head on. It brings together voices from FinTech, banking, insurance and policy to build consensus and inform the national debate on how IP-rich businesses can access growth finance.
At the heart of IPAC’s approach is the Digital Novel Asset (DNA): a way of evidencing the existence, ownership, valuation and control of intellectual property so that it can be recognised and relied upon by lenders. By giving IP the same level of confidence as traditional collateral, DNA opens the door to IP-backed lending at scale.
What IPAC is calling for
IPAC has set out three clear asks to help close the gap:
- Scale the ENABLE Guarantee. Expanding the British Business Bank’s ENABLE Guarantee to support IP-backed lending would give lenders the confidence to finance innovative businesses.
- Modernise prudential rules. Updating Prudential Regulation Authority rules would allow banks to recognise intellectual property as legitimate collateral.
- Endorse an open standard for DNA. Government endorsement of an open standard for Digital Novel Assets would create a trusted, consistent framework that lenders, insurers and businesses can all rely on.
Get involved
IPAC is open to organisations across finance, insurance, policy and innovation who want to help shape the future of IP-backed lending in the UK.
To find out more about IPAC, click IPAC – IPA