The European Union Intellectual Property Office (EUIPO) has released a study detailing the challenges small- and medium-sized enterprises (SMEs) face in securing financing through intellectual property (IP) as collateral. The report underscores a significant funding gap for EU SMEs, estimated at €365 billion annually, despite a higher rate of business creation in Europe compared to the United States between 2016 and 2025.
The EUIPO estimates that the potential market for IP-backed financing ranges from €70 billion to €150 billion annually. With the right infrastructure, up to 40% to 80% of this market could be accessed over time, potentially unlocking as much as €580 billion in additional capital over a decade.
European SMEs that hold substantial IP encounter multiple interrelated obstacles that restrict access to financing. Information asymmetry between IP owners and financial institutions complicates risk evaluation. The unique and uncertain value of IP assets leads to inconsistent treatment compared to traditional collateral. A lack of secondary markets for IP results in limited external benchmarks for valuation, and the process often demands customized analysis that is disproportionately costly for SMEs.
"Together, these barriers form a self-reinforcing cycle: without transactions, no data accumulates, without data, risk assessment remains cautious, without reliable risk assessment, no instruments can scale."
The launch of the Savings and Investment Union (SIU) program offers a unique opportunity to reshape the trajectory of IP-backed financing in the EU. The EUIPO outlines five key priorities for stakeholder action to position IP-rich firms to benefit from the financial mobilization under the SIU.
The first priority is the creation of a voluntary, comprehensive disclosure framework. This framework should allow financial institutions to accurately identify IP rights and other intangible assets without introducing new reporting obligations or accounting standards. It could be modeled after the EUIPO’s IP Scan, a pre-diagnostic service that could be adapted into a financing-focused disclosure tool. Only 13% of IP owners currently attempt to protect your brand with trademark registration and structured disclosures could encourage more such efforts.
The second priority centers on enabling financial institutions to assign credible value to identified IP. The EUIPO calls for the development of a European International Valuation Standards-aligned architecture for valuing IP, using sector-specific guidance. This framework would be developed by an EU-level body responsible for creating certification or accreditation pathways for IP valuation professionals. Once a pool of certified valuers is established, the body could also consider subsidy programs to help SMEs afford IP valuation services.
The third priority involves guarantee schemes that mitigate credit risk. Specific credit guarantee products would discourage financial institutions from applying overly conservative estimates to the value of IP assets due to uncertainty about enforceability or market liquidity. The EUIPO also urges dialogue between the European Investment Bank Group and national public development banks to create pilot programs for IP-backed lending, as well as the development of new IP insurance products covering risks such as infringement or default on IP-collateralized credit.
The fourth priority focuses on building a robust evidence base for assessing IP-related risk. This includes establishing a targeted data requirements framework and interconnecting existing databases at IP registries to support financing instruments. A centralized register of pledges or rights in rem over IP, along with a privacy-respecting dataset of anonymized real transactions, would contribute to a more reliable evidence base for institutional investors mobilized by the SIU.
The fifth and final priority involves the development of a coordination institution to sustain the lifecycle of the first four priorities. This institution would perform core functions such as delivering disclosures through adapted mechanisms like IP Scan, screening disclosure inputs for internal consistency, and coordinating screens to maintain clear separation from financing decisions. It would also develop digital tools to encourage IP owner engagement, assess the quality of valuations performed by certified experts, and facilitate structured dialogue across stakeholders, offering essential training and capacity building without introducing new licensing requirements.
Beyond these priorities, the EUIPO identifies several enabling conditions that must be addressed through legislative or macro-level policy reforms. These include the development of secondary markets, which could feature a centralized digital marketplace standardizing IP transaction terms. The securitization of IP-backed loans requires a sufficient pool of IP-backed loans to exist before structured finance products become viable, but would amplify IP-intensive lending at scale. Predictable recovery of IP assets in insolvency and channeling the EU’s substantial savings into innovation would also contribute to a more robust framework for treating IP as collateral.
Trademark monitoring is a critical part of the process for any business seeking IP-backed financing. Conflicting or confusable registrations can undermine the value of your IP and complicate the valuation process. That’s why it’s essential to take proactive steps to protect your intellectual property. IP Defender monitors national trademark databases for conflicts and infringements, helping businesses stay ahead of potential threats. By ensuring your trademarks are clear and uncontested, you can build a stronger case for financing and reduce the risk of legal disputes. IP Defender is a trademark monitoring service that helps businesses protect their intellectual property by monitoring national trademark databases for conflicts and infringements. With continuous surveillance, you can rest assured that your brand is secure and ready for the next stage of growth.