Scotland’s first IP-backed lending product: further evidence that intellectual property is now a mainstream business asset

For years, innovative businesses have been told their IP is valuable, now banks are starting to treat it that way. The launch of the Royal Bank of Scotland’s new intellectual property (IP)-backed lending product is an important development for Scotland’s innovation economy. It gives businesses a new route to finance by allowing them to borrow against the value of their IP, rather than relying solely on traditional fixed assets such as property, plant or machinery.

The product offers loans of between £250,000 and £10 million and is the first offering of its kind in Scotland. Its launch follows the implementation of the Moveable Transactions (Scotland) Act 2023, which modernised aspects of Scotland’s law relating to secured transactions and introduced a framework that allows IP and other moveable assets to be used more effectively as collateral. The Scottish launch also builds on NatWest Group’s existing IP-lending model in England and Wales (see High Street Bank to Accept IP Assets as Security for Loans), which began in 2024 and has already supported substantial lending to innovation-led businesses.

The rationale behind the scheme is straightforward. Many modern businesses are rich in intangible value but light on conventional collateral. Technology companies, software developers, life sciences ventures, university spin-outs and creative businesses may hold significant value in patents, software, brands, designs, data and know-how, even where their balance sheets do not reflect extensive physical assets. For those businesses, access to debt finance secured against IP may provide an attractive alternative to equity funding and reduce the need for immediate dilution.

But the real significance of this development goes beyond the availability of a new finance product. It is another indication that IP is increasingly being recognised not merely as a legal right, but as a core commercial asset. In that sense, IP-backed lending does not create a new reason for businesses to take IP seriously; rather, it reinforces the importance of doing what strong businesses should already be doing: identifying, protecting, organising and exploiting IP in a way that supports long-term commercial objectives.

Whether a company is raising investment, preparing for acquisition, entering into licensing arrangements or exploring secured borrowing, the same core questions arise. Is the relevant IP properly identified? Is ownership clear? Does the protection strategy reflect commercial priorities? Can the business explain how its IP contributes to revenue, differentiation and future growth? Businesses that can answer those questions convincingly are generally better placed not only to access finance, but to capture wider value from their innovation.

For that reason, businesses should be thinking about IP strategy well before any lending discussion begins. Useful questions include:

• Which intellectual assets genuinely underpin our competitive advantage?
• Are our research, development and innovation activities producing IP that should be protected?
• Is ownership properly documented across founders, employees, consultants and group entities?
• Does our portfolio of patents, trade marks, designs, copyright and know-how reflect our commercial priorities?
• Can we demonstrate how our IP supports revenue, market position and long-term growth
• Are IP considerations embedded in board-level strategy and decision-making?

There is, however, an important note of caution. IP-backed lending is still secured lending. If repayment obligations are not met, the assets used as security may ultimately be lost. For innovation-led businesses, that risk can be especially acute, because the relevant IP may sit at the heart of the company’s products, services and growth plans.

As the market develops, robust valuation methods, careful underwriting and thoughtful stewardship of IP assets will be critical. The goal should not simply be to monetise IP in distressed or default scenarios, but to support sustainable growth and help valuable innovation continue to generate economic returns.

Ultimately, the arrival of Scotland’s first IP-backed lending product matters not just because it expands funding options, but because it reflects a wider shift in market thinking. IP is increasingly being treated as a business-critical asset with strategic, transactional and financial value. Businesses that manage it with that mindset will be in the strongest position to benefit, whether through lending, licensing, investment, acquisition or long-term growth.

As the market develops, businesses that take a strategic approach to IP will be best placed to benefit. If you would like to discuss how IP can support your wider commercial, growth or investment objectives, please reach out to Andrew Docherty or a member of our team here.

Royal Bank launches “game-changing” IP lending product for Scotland’s scaleups, spinouts and other IP-rich firms.

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