Patents Instead of Property — Why IP Finance Is Growing
Plenty of Korean SMEs have proven technology but no real estate to pledge, and that gap often shuts them out of bank lending. Intellectual property (IP) finance is becoming a practical way around it. According to the Korean Intellectual Property Office's successor agency, the Ministry of Intellectual Property (지식재산처), the outstanding IP finance balance reached KRW 12.4 trillion at the end of 2025, up 14.8% from KRW 10.8 trillion in 2024. New lending in 2025 alone came to KRW 3.1 trillion, a 5.2% increase on the previous year.
IP finance comes in three main forms:
If you have already used up your policy loan limits or lack property collateral, it is worth checking whether your patents can do the job instead.
IP-Backed Loans — Which Banks, Which Patents
As of 2026, IP-backed loans are offered by KB Kookmin, Kyongnam, IBK, NongHyup, iM Bank, Busan, KDB, Shinhan, Woori and Hana. Interest rates, limits and eligible industries differ by bank, so confirm terms directly with each lender.
Eligible borrowers are SMEs and mid-sized companies that hold a registered patent and are actively commercializing it. Pending applications or patents with no link to revenue rarely qualify. Keep in mind that the loan limit is set by applying the bank's internal criteria to the valuation, so the appraised value is not the amount you will receive.
50% Valuation Cost Support
An IP-backed loan requires a professional valuation, and the fee can be a burden. The IP-Backed Loan Linked IP Valuation Support Program (Notice No. 2026-64), run by the Ministry of Intellectual Property and the Korea Invention Promotion Association, covers 50% of the valuation cost for companies applying for an IP-backed loan.
The process generally runs as follows:
Support ends once the annual budget runs out. If you plan to apply in the second half or near year-end, check how much budget remains first.
Non-Face-to-Face IP Finance and IP Investment — New Channels
In June 2026, the Ministry signed memoranda of understanding on non-face-to-face IP finance with K Bank, KakaoBank and Toss Bank. These are still at the planning stage, so confirm that an actual product has launched before counting on it.
On the investment side, plans were announced for a KRW 136.7 billion IP investment fund under the patent account of the Korea Fund of Funds, covering direct IP investment, IP transactions and commercialization, and patent technology commercialization.
Whether debt or equity fits better depends on your stage. A company with steady revenue and repayment capacity is usually better served by a loan, which avoids dilution. A pre-revenue company where growth speed matters most may find investment the better fit.
Not All Patents Appraise Equally — A Preparation Checklist
Combining With Other Support
The most effective path is to take patents from R&D projects, borrow against them, and put the funds into commercialization. Rules on overlap and limits with policy loans and technology guarantees vary by institution, so check in advance.
KITIM helps with patent portfolio diagnosis, commercialization-linked business plans, and financing strategies that combine loans, guarantees and investment. If you want to know whether your patents can raise capital, contact KITIM for a consultation.