Singapore SMEs can now use IP assets as collateral for bank loans

SINGAPORE - Companies with significant intellectual property (IP) assets can soon use them as collateral to obtain bank loans.

A $100 million dollar IP financing scheme was launched on Tuesday to help local small and medium-sized enterprises (SMEs) use their granted patents as collateral for bank loans.

Under the scheme, companies can get their IP assets valued by a panel of professionals.

The valuers will determine the worth of the IP, which will help banks to decide the quantum of loans that can be granted to the firms.

The government will co-share the default risk with the banks. The share of risk that the government will take will be determined on a case-by-case basis.

The maximum amount of loans that can be given to a firm is not fixed, as it depends on the value of the IP asset.

The three local banks, DBS, OCBC and UOB, are the lenders participating in the scheme at the moment.

Mr Lim Chu Chong, DBS' head of SME banking, said: "A growing number of companies, especially SMEs, are paying greater emphasis to IP."

OCBC global commercial banking head Linus Goh added: "The newly launched IP financing scheme recognises the value of IPs deployed in businesses today and offers a new source of financing for businesses."

UOB head of group commercial banking Eric Tham said: "We welcome the opportunity to partner forward-looking home-grown businesses that will use their IP assets to move up the value chain."

The scheme was announced by Senior Minister of State for Law Indranee Rajah at the officia opening of IP 101, a one-stop IP service centre developed by the Intellectual Property Office of Singapore.

She also launched a new IP campaign, Embracing IP, which is aimed at bringing greater awareness of IP to the public through public education and outreach events.