Lombard, the UK asset finance provider, has launched a finance product based on intellectual property called Software Licence Solution (SLS)
The product is aimed at businesses which develop their own software, including development outsourced to a third party, and own the corresponding rights.
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When a company applies for SLS, Lombard attributes a value to a company’s software using a mix of revenue streams, research and development expenditure, and market assessments. The intellectual property is sold to Lombard, which then licences use of the software back to the business for an agreed term, which is expected to usually be three to five years.
At the end of the agreed term, a business can continue using the intellectual property via an ongoing fee at a nominal rate. Alternatively, the other option is for a business to introduce an independent third party to buy the intellectual property.
Keith Nowland, regional sales director at Lombard Technology Services, said: "This innovative asset finance product recognises the value that software development has within a business and presents a real opportunity for firms to release cash that can be used in different areas, such as research and development or purchasing other assets."
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