NatWest has launched a new lending proposition for high-growth businesses to enable them to lever off the value of their Intellectual Property (IP). High-growth businesses generally own few tangible assets, but can be rich in IP and intangible assets. These businesses can find it difficult to use their assets as collateral to secure growth funding, especially when compared with firms holding more conventional assets. This has led to a large growth funding gap for fast-growing, asset-light businesses, estimated to be as much as £15bn annually.
Therefore, NatWest is evolving its high-growth lending offering to support eligible IP-rich businesses to unlock their full potential. Bank will always initially assess loan applications to establish whether the customer meets the criteria for standard lending options. However, if the bank cannot meet a high-growth business’ borrowing needs through conventional security criteria, it will consider whether it could raise funding by using its qualifying IP assets as collateral. The bank will use valuations provided by the specialist IP evaluation company Inngot to identify and evaluate relevant assets which could be taken as security for loans.
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Scale-ups generated £1.3trn in 2023
Scale-ups are defined as businesses that grow at more than 20% per annum. The wider impact of scale-ups is demonstrated by the latest report from the ScaleUp Institute. In 2023 there were 28,410 scale-ups which generated a total turnover of £1.3trn for the economy and employed 2.6 million people. These firms have an outsized impact on the economy, generating 58% of the turnover of all UK SMEs despite making up just 0.5% of the SME population.
Andy Gray, Managing Director of Commercial Mid-Market at NatWest Group, said: “As the UK’s leading business bank, we are delighted to have joined forces with Inngot, to provide a truly innovative and progressive proposition for high growth SMEs and scale-up businesses. Many of these businesses struggle to access debt funding when they need it without having to dilute equity. This new offering will allow these firms to go further and faster in their growth journey.”
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