IP as collateral: Loan against our IP used to finance acquisition (vertical - downstream)

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November 05, 2025

by a searcher from SDA Bocconi - School of Management in Fort Lauderdale, FL, USA

Does anyone have experience with specialized debt funds Lending against strong IP (patents, trademark with proven sales records, trade secrets, "capitalized intangible assets") What do typical LTVs or financing terms look like? We have the IP already and we are IP heavy (hardware), proven demand. As soon as this is 100% legally tied up. We'll need distribution - fast. We are considering *acquiring* or merging into the distribution, (something boring) - just to help us penetrate into the market and going. (I know there are many ways to structure this) We'd like to use our IP as collateral for a loan - Use the proceeds towards the down payment of acquiring the downstream company with the distribution, customers lists, systems and "goodwill" we need (this is probably a rare case where "goodwill" actually has value lol) Does this make sense? Obviously the other fast/safest way would be for us to work out a JV with a Big Company (like Alienware/Dell, T.I., et al) We will see. My team gets easily distracted with "shiny object syndrome" and I sometimes feel like I am trying to "heard cats" I keep the focus on where we are today but I am planning###-###-#### moves ahead...
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Reply by a searcher
from Stanford University in Healdsburg, CA 95448, USA
Typically, IP is pledged as part of the security rather than being the primary basis of the loan. Without being clearly and easily monitizable, lenders will have a hard time considering it effective collateral. If the company is able to monetize its IP portfolio, it would probably be more accurate to describe it as borrowing against a stream of revenue that the IP is enabling (ie. licensing) and that revenue would be the basis of your LTV and other metrics. Thanks for the tag, ^redacted‌.
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Reply by a professional
from University of Miami in New York, NY, USA
^redacted‌ Thank you for the tag. I believe you are looking for venture debt, or similar. I have a few contacts we could introduce you to once you are a client, as well. The loan amount is going to be a percentage of what the lender deems the value, meaning if they had to take the IP as collateral, how much could they sell it for. I’m not sure what the discount rate is in that, but we can discuss. I would love to help. We also do outside general counsel work. Feel free to grab some time with me: Vishal S. Petigara, Esq. Managing Member Petigara Law Group, PLLC Tel: +###-###-#### Email: redacted https://calendly.com/petigara-law-group/meeting-with-vishal-petigara
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