(ip) hub master plan - Ministry of Law

hand, should be more actively involved for the more mature and proven IP, where
the risks are more defined and can be better managed.
Early stage IP Mature IP
Venture Capital /
Private Equity
A. IP-Backed Loans
IP Loans (By Banks)
Professional Markets
IP Funds
Figure 3.2.: Financing approaches for different stages of IP.
29
Securitisation, Bonds
3.3.7. Several countries have implemented or will be implementing IP-backed loan
programmes to help their domestic SMEs obtain financing using their IP as
collateral, including Japan, Thailand, China, and more recently, Malaysia.
3.3.8. In Singapore, local banks are generally more conservative, and have concerns
accepting IP assets as collateral. Consequently, our IP-rich but asset-light
companies, especially those in the R&D and technology sectors, often experience
difficulties in obtaining loans from local banks or other financial institutions to
finance growth and expansion. A 2010 study conducted by INSEAD found that the
limited availability of growth capital and restrictive bank lending is one of the
barriers for the growth of high-tech SMEs in Singapore. 20 MNCs, on the other hand,
are typically already able to raise capital through their existing credit facilities.
3.3.9. IP-backed loans will enable Singapore-based companies that are rich in IP to reach
the next stage of development and compete in international markets. This will also
help attract regional high-tech or IP companies to relocate their IP and related
operations to Singapore to access capital.
Recommendation 2-1
Introduce an IP financing scheme, where the Government partially underwrites the
value of IP used as collateral.
20 INSEAD, 2010. High tech SME gap in Singapore.
http://www.insead.edu/facultyresearch/centres/global_private_equity_initiative/students/documents/HighTe
chSMEinSgp_Oct2010.pdf (accessed Feb 2013).