Unlocking Capital from Code: How Technology and SaaS Companies Can Leverage Intangible Assets as Loan Collateral

During my years at NM Rothschild & Sons, I was involved in structuring asset-backed securities and developing innovative financing products across international markets. The assets we securitised were typically physical — ships, aircraft, infrastructure. The structures were complex, but the underlying collateral was conceptually simple: tangible things with observable secondary markets and well-understood depreciation curves.

The world has moved on. The most valuable companies in the global economy are now technology firms whose primary assets are intangible: proprietary software, patents, algorithms, customer data, recurring revenue contracts, and the organisational know-how to deploy all of these at scale. Yet the lending and structured finance markets have been remarkably slow to adapt. The result is a capital market failure that is costing the technology sector billions in unnecessary equity dilution and constraining growth across PE-backed portfolio companies.

The Collateral That Lenders Cannot See

A typical SaaS company with £50 million in annual recurring revenue might have tangible assets worth less than £2 million — some servers, office furniture, perhaps a short lease. On a traditional lending assessment, it barely qualifies for a modest facility. Yet its enterprise value might be £200 million or more, supported by proprietary software that took a decade to build, a patent portfolio protecting key innovations, customer contracts with 95%+ net retention, and a proprietary data asset that improves product performance with scale.

The gap between the tangible asset base and the enterprise value is almost entirely explained by intangible capital. And that intangible capital is, in principle, available as collateral — if lenders and borrowers can agree on identification, valuation, and security structures.

Three Intangible Collateral Classes in Technology

From a structured finance perspective, technology companies present three distinct classes of intangible collateral, each with different characteristics and suitable structures.

Software intellectual property and patents. This is the most established category for IP-backed lending. The proprietary source code, registered patents, and associated trade secrets that constitute a technology company's core product can be pledged as collateral through structures that transfer the IP to a special purpose vehicle (SPV), which licenses it back to the operating company. In a default scenario, the lender can enforce against the SPV and either license or sell the IP. The challenge is valuation: software IP is highly specific, secondary markets are thin, and obsolescence risk is real. But for mature, revenue-generating software with demonstrable market position, robust valuations are achievable.

Recurring revenue contracts and customer relationships. SaaS businesses generate contractual recurring revenue with high predictability. These revenue streams can be securitised in structures analogous to the asset-backed securities I worked on at Rothschild — the economic substance is a predictable cash flow backed by a diversified pool of contractual obligations. The customer contracts themselves, and the broader customer relationships they represent, constitute identifiable intangible assets. Net revenue retention rates above 100% indicate that the asset base is appreciating rather than depreciating, which is a characteristic few tangible assets can match.

Proprietary data assets. This is the frontier category. Companies that have accumulated proprietary datasets — user behaviour data, training data for machine learning models, market intelligence — possess assets of genuine and growing value. The 2025 SNA revision's recognition of data as a productive asset reflects an emerging consensus that data has capital characteristics. Data-backed lending structures are nascent, but the conceptual framework is sound: a defined data asset, held in a controlled environment, generating identifiable economic returns, with transfer mechanisms in the event of enforcement.

Structures That Work

The lending structures for intangible collateral in technology broadly follow three models.

The IP holdco structure. The company's core IP is transferred to a holding company (or SPV) that sits outside the operating entity's creditor waterfall. The SPV grants an exclusive licence back to the operating company and pledges the IP as security to the lender. This isolates the IP from operating company insolvency risk and gives the lender a clean enforcement path. It is the structure most analogous to traditional asset finance, and it is the most mature in the market.

The revenue securitisation structure. Future recurring revenue streams are assigned to an SPV that issues debt securities backed by those cash flows. This is conceptually identical to the asset-backed securities structures I worked with in international bond markets — the difference is that the underlying asset is a stream of software subscription payments rather than lease payments on a physical asset. Rating agency methodologies for these structures are developing, and we are beginning to see rated transactions in the market.

The hybrid structure. The most sophisticated approach combines IP collateral with revenue securitisation in a single facility. The lender takes security over the IP (providing enforcement optionality) while also having a first claim on the revenue streams generated by that IP (providing cash flow coverage). This structure offers better risk-adjusted returns for lenders and higher advance rates for borrowers than either approach alone.

Why PE Firms Should Pay Attention

For private equity firms with technology and SaaS portfolio companies, intangible asset-backed lending represents a significant opportunity on three dimensions.

First, it enables capital structure optimisation without equity dilution. A PE-backed SaaS company that can raise debt against its IP and recurring revenue base preserves equity value for the sponsor while accessing growth capital at a lower cost. In a market where entry multiples for quality SaaS assets routinely exceed 15x ARR, the ability to leverage the intangible asset base directly affects fund returns.

Second, it provides acquisition financing flexibility. PE firms pursuing buy-and-build strategies in technology can use the combined intangible asset base of merged entities as collateral for acquisition debt. The IP portfolios and customer bases of acquired companies become part of the collateral pool, enabling further acquisitions without proportional equity injection.

Third, it creates exit value enhancement. A portfolio company that has a demonstrably structured and valued intangible asset base — with established lending relationships against those assets — presents a more sophisticated and de-risked profile at exit. Buyers, whether strategic or financial, can see the capital structure potential of the intangible assets they are acquiring.

Get the valuation data lenders need. Opagio's Intangible Asset Valuator produces structured, consistent intangible asset valuations from standard financial data — exactly the rigour that lenders require. Portfolio managers can bulk import companies via CSV or connect Xero accounting software to generate valuations automatically across their SaaS holdings. Try the Valuator free | Talk to our team

The Valuation Imperative

None of this works without credible intangible asset valuation. Lenders will not advance against assets they cannot value, and borrowers will not achieve optimal terms without robust, defensible valuations.

At Opagio, we have developed frameworks for identifying and valuing the full spectrum of intangible assets in technology companies — from core IP through to customer relationships and data assets. These valuations are designed to meet the requirements of lending institutions, providing the transparency and rigour that structured finance demands.

The technology sector's intangible assets are too valuable, too well-defined, and too productive to remain outside the lending market. The structures exist. The valuation methodologies exist. What has been missing is the systematic approach to connecting technology companies' intangible asset bases with the capital markets that should be financing them.

That gap is closing. The question for PE firms and fund managers is whether they will lead the transition or follow it.

Tony Hillier is co-founder of Opagio. He holds an MA from Balliol College, Oxford and an MBA with distinction. Tony held executive board positions at NM Rothschild & Sons and GEC Finance, and a non-executive directorship at Financial Security Assurance in New York, where he specialised in structured finance, asset-backed securities, and cross-border tax-leveraged leasing.