Tech firms using IP rights as collateral

Companies which pledge patent rights to get bank loans are becoming a popular way to secure financing in southeastern China, where many technology startups are looking for funding support to sustain their growth.

A technology-oriented branch of Tailong Bank, a local commercial bank in Taizhou, Zhejiang province, had issued 165 million yuan ($23.5 million) in patent pledge loans by the end of September, accounting for more than 55 percent of total outstanding loans by the branch, the bank said.

Supporting local technology startups, which have independent intellectual property and innovative business models, is the key service of the Tailong Bank to win new clients, said Yuan Zhiwei, a senior manager of the bank's branch in Taizhou.