It is common to use property such as houses to get financing, but what about less tangible property, namely intellectual property?
If the Government has its way, Singapore will become a centre where such assets of the mind can be turned into gold. But as Ms Indranee Rajah, Senior Minister of State for Law and Education said on Thursday on the sidelines of an intellectual property (IP) symposium at Marina Bay Sands, one key challenge in using such creative assets to help firms raise funds is in determining its value.
"You need to develop valuation expertise in order for this happen," she told The Straits Times, noting that this comes from experience in using accounting principles and transactional data to arrive at the fair market value of an asset.
"If you have a trademark, its value depends a lot on what people would pay for it. What you would pay, for example, for a Nike trademark is very different from what you would pay for (the trademark) of a new company's product that has not been tried and tested," she said.
Ms Indranee said plans are in the works, albeit at an early stage, to build talent in IP valuation. The goal is to groom home-grown IP valuers and create job opportunities for Singaporeans.
The IP event was organised by the Chartered Institute of Arbitrators' Singapore branch, the World Intellectual Property Organization and the Singapore International Arbitration Centre, with law firm Olswang Asia as a main sponsor.
Held here for the first time, it drew more than 160 participants from the Asia-Pacific region, Europe and the United States.
Using IP as a way to raise funds and facilitating IP financing activities is part of the Government's 10-year masterplan to make Singapore a global IP hub.
For a start, the Government is expected to launch a new IP financing scheme in the first quarter of this year. The scheme will allow local firms to use their IP as collateral when applying for bank loans. The Government will partially underwrite the value of patents, meaning that banks will not have to bear all the risk if firms cannot repay the loans.