IP Innovations Financial Services, a start-up guarantor of loans secured by intellectual property, recently closed its first deal, wrapping a small term loan (less than $10 million) to ATD Corp. for the benefit of lender GMAC Commercial Finance.
The transaction is a potential windfall for IPI, as it represents a vote of confidence from a top tier lender. In a prepared statement, Douglas Monda of GMAC Commercial Finance said, "IPI's credit enhancement was a key to completing this transaction. Their ability to assess intellectual property value and risk provided us with a significant comfort level."
ATD is a provider of thermal and acoustic insulation products for the automatic and appliance industries. GMAC provided a revolving loan to ATD backed by accounts receivable and inventory. The term loan, which is guaranteed by IPI, is secured entirely by patents, trademarks and related licenses, IPI said.
IPI's strategy is to line up trades - generally between middle-market lenders such as GMAC and borrowers with substantial value in IP assets. IPI then assesses and provides a full principal guaranty against the value of the intellectual property of the company. In the event of a default, the firm makes the lender whole and seizes the intellectual property assets.
IPI is hoping to generate relationships with the bank lending community as well. Last fall, the company scored $28 million in start-up capital from Principal Financial Group (see ASR 12/15).