SMEs are the lifeblood of the UK economy. Their ability to innovate and grow fast are a key determinant in our successful post covid-19 recovery, and to our nation’s long-term competitiveness. However, most SMEs will require funding during the restart phase to fuel innovation and market development.
How will SMEs operating within the UK knowledge-based economy, secure the funding they need to drive the economic recovery we all need?
With most mainstream lenders still requiring security against fixed assets, this could be a major stumbling block.
In today’s knowledge-based, data-driven economy, fewer companies have the need to invest in tangible assets: a survey by Standard & Poors in 2018 showed that 84% of the total value of S&P top 500 companies was made up of intangible assets, up from 17% in 1975, when the top 500 companies was dominated by more traditional manufacturing companies.
So, how do we facilitate access to much needed loans for companies where the main assets are intangible, particularly intellectual property for which there is no standard valuation process?
Software asset finance uses the hidden value of a company’s unique software intellectual property (IP) as collateral for security, therefore providing an innovative way of raising funding for a business with limited fixed assets, without sacrificing control of valuable intangible assets.
ABGI recently supported one its clients in developing immersive AV experiences for health & fitness, hospitality and retail sectors. The company developed its own proprietary software for improved management of integration and distribution of data and audio and video signal. They were looking for a significant amount of money to support commercialisation and market development but had limited assets against which a lender could take security.
After review, ABGI introduced the client to a lender who was able to value the proprietary software and secured a term loan of £1.6million against the software IP, thus giving their client the working-capital it needed, while retaining ownership and access to the IP which gives it competitive advantage in its chosen markets.
If you have a project that you think may qualify for this funding, as a Digital Lancashire member we can refer you to ABGI, our innovation and funding partner, who can discuss this opportunity in further detail and offer support for potential applications. For further information please get in touch with the ABGI team at firstname.lastname@example.org
One of the world’s leading tax incentive and innovation management advisers. They have a 30+ year heritage, 200 experts and advisers, and manage £1billion of global tax incentives annually for a broad range of clients including some of the world’s best-known brands. Their aim is to help clients accelerate and fund their innovations.
As a worldwide industry leader in innovation funding, ABGI are supporting their clients recover from the economic impact of the coronavirus pandemic. They specialise in helping companies who are already claiming tax incentives but are looking to optimise their claim, experience a better service or pay a more competitive price – or all of the above of course. For more information click here