Using Intellectual Property as Collateral for Financing
Saudi entrepreneurs finally have the ability to mortgage their IP assets for financing, just as they mortgage real estate. This is a significant financial development opening doors for tech and creative companies.
How the Model Works
The company values its IP portfolio through a certified appraiser. The value becomes the loan basis.
A "security interest" is registered on the assets with SAIP — equivalent to a real-estate mortgage but on IP.
If the company defaults, the lender may sell the assets to recover the debt.
What Works as Collateral
Trademarks with proven fame and clear market value.
Patents generating income (active licenses).
Copyrights on content with measurable revenue (music, films, software).
Commercial databases with value.
What Does Not Work
Recent marks with no revenue history.
Patents owned but not commercially exploited.
Trade secrets (hard to value and transfer).
Available Loan Value
Lenders typically loan 20–40% of portfolio value (LTV ratio).
A SAR 10M portfolio = possible loan of SAR 2–4M.
Loan ratio depends on: asset liquidity, revenue stability, competitive position.
Procedure in Saudi Arabia
Official valuation through a certified appraiser from the Ministry of Justice or Saudi accountants body.
Registration of the security interest with SAIP — available since 2022 under recent reforms.
A loan contract with the bank or lender defining terms, interest, and enforcement path upon default.
Available Lenders
Social Development Bank: financing for creative and tech projects.
Venture capital funds: take IP security alongside equity.
Commercial banks: have begun accepting IP collateral but with conservative terms (lower ratios).
Online financing platforms: a new model for IP-secured loans.
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