New finance product helps businesses make the most of software development

Lombard, the leading UK asset finance provider, has become the first such firm to offer a finance product based around intellectual property.

Its technology division, Lombard Technology Services (LTS), recently launched the product, which is aimed at businesses that develop their own software (including development outsourced to a third party) and own the corresponding rights.

The Software Licence Solution (SLS) is designed to help such businesses free up cash that’s locked into software so that it can be re-invested – either back into further development of the software or elsewhere.

Keith Nowland, regional sales director at LTS, 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.

“Our specialists attribute a value to your software using a mix of revenue streams, research and development expenditure and market assessments.

“The intellectual property is sold to us and we then licence use of the software back to the business for an agreed term, which is usually three to five years.”

With SLS, businesses therefore retain the day-to-day commercial use and ongoing development of the software but with its value unlocked.

SLS is also available to businesses in any sector (subject to a number of qualifying conditions), meaning these benefits can be enjoyed across a huge variety of UK industries.

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. Provided that this introduction has been made direct and there is no default, the software can then be sold to that third party.

Keith Nowland, said: “Our asset finance expertise and experience have already enabled hundreds of customers to buy the hardware and IT management solutions they need to sustain their growth.

“We’re now applying that experience and expertise to IP software, providing an innovative service and a product that can help businesses grow and look to the future with confidence.”