This is the second article in a four-part series on IP-backed finance, from the innovator’s side: what companies and their IP advisers can do to prepare their assets for financing.
In IP-backed finance and the disclosure paradox, we looked at a difficulty facing companies seeking finance against their intellectual property: how to give others enough information to assess an asset while preserving its confidentiality.
This time, we cross to the other side of the table. Suppose the company is ready to share that information. Why do lenders still hesitate?
The EUIPO’s 2026 report on IP-backed finance describes a vicious circle. Too few transactions produce too little data. Without reliable data, lenders remain cautious. And cautious lenders make fewer deals.
Breaking that circle requires coordinated work across the financial system. But part of the answer begins much closer to home, with the company’s records and the advisers who understand its assets.
The vicious circle
A bank considering a loan against machinery has something concrete to work with. There are established markets, comparable sales and experience of recovering value when borrowers default.
For IP, those reference points are harder to find. A patent portfolio, a proprietary process and a body of software may each be valuable, but assessing what could be recovered from them is a different exercise. Their usefulness may depend on particular people, complementary technology or a business that knows how to put them to work.
The report describes the resulting caution: lenders apply substantial discounts to estimated values or leave IP out of their recovery calculations altogether.
That caution is difficult to overcome without experience. Lenders need evidence of how IP-backed loans perform, what happens when borrowers default and how much can ultimately be recovered. Yet each institution has little incentive to build that experience alone.
What the report proposes
The EUIPO proposes public guarantees to share lending risk, better data on repayments and recoveries, and a central register of IP pledges to help lenders assess competing claims.
These measures would give lenders more confidence and better reference points. They require coordination and time. Meanwhile, companies can prepare the information every transaction will need: a clear, verifiable account of the assets being offered.
What a lender needs to know about one asset
Consider a company offering proprietary software or a manufacturing process as part of a financing proposal. Before a lender and its advisers can assess it, they need a clear account of what the company holds.
Four questions provide a useful starting point.
What exactly is it?\
A registered right has an entry in a public register. A body of source code, a dataset or a confidential process needs another way to establish its boundaries. Which files, versions and supporting materials make up the asset? A description such as “our production software” leaves considerable room for uncertainty.
Who owns it, and since when?\
The history may involve founders, employees, contractors and acquired businesses. Assignment agreements and development records help explain how their contributions became part of the company’s assets. A clear chain of title makes that history easier to examine.
Which version is being assessed?\
Software changes, datasets grow and processes improve. The parties need to know which version they reviewed and how later developments relate to it. Keeping a dated history allows them to return to the same reference point.
How has confidential material been shared?\
For trade secrets and know-how, the conditions of disclosure matter. Who received access, to which material, and under what agreement? A documented sharing history helps advisers understand how confidentiality has been managed.
The answers also help reveal dependencies. A process may require specialist knowledge to operate; software may rely on components licensed from others. Identifying those connections early gives everyone a more useful picture of the asset.
How Bernstein helps build those answers
Much of the information comes from the company’s daily work: development files, contracts, technical documentation and records of disclosure. Bernstein gives those materials a certified history that the company can present and a lender’s advisers can check.
Its role is concrete in each of the four questions.
Identify the exact asset.\
Bernstein creates a cryptographic fingerprint of the files in a certified revision. Counsel can reference that revision in an asset description or supporting agreement, giving the parties a precise set of materials to refer to. Files are encrypted before leaving the owner’s device, so even sensitive code, formulations and process documentation can be included without exposing their contents to Bernstein.
Document its history and support the ownership review.\
Bernstein anchors fingerprints to the Bitcoin blockchain and trusted timestamp authorities, including EU qualified timestamps. Certifying development records alongside assignments and other agreements gives counsel dated evidence to examine when reconstructing who contributed what and how the company acquired its rights.
Preserve the version under review.\
Bernstein keeps immutable, dated revisions together with the encrypted original files. If the software develops during a financing discussion, the version initially reviewed remains available. The lender’s advisers can check that a file matches its certificate and distinguish it from subsequent revisions.
Control and record disclosure.\
When a valuer or lender needs access, Bernstein’s secure sharing provides time-limited links, one-time passwords, contract acceptance before access and verifiable access logs. The company can share the relevant material and retain a record of access through that channel.
Together, these capabilities turn a collection of working files into a verifiable record of the asset’s development and disclosure.
For example, a software company preparing for financing could certify a release together with its technical documentation, preserve the relevant contributor agreements, and give a valuer controlled access to that revision. If development continues during the review, everyone can still identify the version on which the assessment was based.
The evidence also remains usable beyond the immediate transaction. Certificates can be verified independently of Bernstein, and owners can export them with the original files and the materials needed for later verification. Preserving that package allows future reviewers to examine the same evidence.
A role for IP counsel
IP counsel brings two kinds of knowledge to a financing discussion: the technical understanding needed to assess the innovation, and familiarity with the client’s assets and how they were developed.
Together, these help counsel explain what a lender is being asked to assess: which assets underpin a product or process, how they relate to one another, and which agreements and records support the company’s rights. For software, trade secrets and know-how, that context can be particularly valuable because much of it will never appear in a public register.
An adviser who knows the client’s development history can also spot what is missing. A contractor’s contribution may need a clearer assignment. An important process may be poorly documented. The version offered for review may differ from the one described in an earlier agreement. Addressing these questions before the financing discussion makes the subsequent review easier.
Bernstein gives counsel a practical way to preserve and substantiate that work. Counsel determines what belongs in the evidence file, connects the technical materials with their legal history, and decides what a reviewer needs to see. Bernstein certifies the selected records, preserves their versions and supports controlled disclosure.
This makes the adviser’s knowledge easier to share with lenders and valuation specialists. They receive a coherent account of the assets, supported by evidence they can examine directly.
Breaking the circle from the inside
The wider market needs more transactions, better data and institutions willing to share risk. Companies and their advisers can contribute by making the assets behind each proposed transaction easier to understand.
That work can begin well before a loan application: identify the assets, preserve their development history, connect them to the relevant agreements and keep track of disclosure. Bernstein makes certification, preservation and controlled sharing part of that ongoing process.
For IP counsel, it is a natural extension of knowing the client and protecting its innovation. When a financing opportunity arises, the company has a documented history ready for review, rather than a reconstruction to begin.
The next article looks more closely at blockchain’s role in IP finance, from the ambitions surrounding tokenised patents to its practical use in creating verifiable records.
Explore how Bernstein helps you build a certified, independently verifiable record of your IP.
Source: EUIPO, IP-backed Finance (April 2026), particularly the Executive Summary; sections 2.1.2, 3.1.2 and 3.1.7; and Priorities 3 and 4.
