More recently, a new trend has emerged in the lending industry, focusing on collateralizing intellectual property (IP) assets as a form of loan security, known as IP lending or IP-backed lending. As the CEO of Avon River Ventures, an IP lending and traditional asset-backed lending firm, I want to explore the key differentiating points between IP-backed lending and ABL, along with a few scenarios that I have witnessed while lending to traditional asset-rich companies versus lending to IP-rich companies. Borrower's Profile• IP lending: IP-backed lending primarily caters to innovation-based companies with robust terminal values and comparatively higher net enterprise values. Accounting Methodologies• IP lending: Intangible asset reporting on the balance sheet differs significantly from traditional asset-backed reporting. I believe that as innovation drives economic growth, IP-backed lending will likely play an increasingly prominent role in finance.

Source: Forbes January 20, 2024 00:02 UTC